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COVID-19 Update

Alliant Wealth Advisors is an "essential business" under Virginia state law and we remain fully operational during the COVID-19 crisis.

To keep our clients, staff and colleagues safe we are currently holding all meetings via video conferencing. And we are alternating a small number of staff in our office while the majority serve you from their home.

Speaking of our office. Our headquarters in Prince William will relocate to the Signal Hill Professional Center at 9161 Liberia Avenue, Suite 100, Manassas, VA 20110 effective Monday, April 20, 2020.

Whether we are virtual or in person, we are here for you. Please keep safe.

Best Regards,

John Frisch, CPA/PFS, CFP®, AIF®, PPC®

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Biden’s Tax Plan

It’s official. The Georgia runoffs left us with a 50 Democrat/50 Republican U.S. Senate, with VP Harris to break tie votes. While this balance doesn’t assure a slam dunk, Biden’s income tax proposals now stand a better chance of scoring than they did before.

What might that mean? The nonpartisan Committee for a Responsible Federal Budget (CRFB) estimates Biden’s tax plan could raise around $3.5 trillion over a decade. “The Biden tax plan is highly progressive,” the CRFB reported, “increasing taxes for the top 1 percent of earners by 13 to 18 percent of after-tax income, while indirectly increasing taxes for most other groups by 0.2 to 0.6 percent.”

President Biden hopes to:

  1. Raise the maximum individual tax rate to 39.6% (from 37%) and, generally, raise taxes on annual income above $400,000.
  2. Limit the tax benefit of itemized deductions to 28% (which limits the benefit for taxpayers taxed at higher rates).
  3. Raise the long-term capital gains tax rate to 43.4% (from 23.8%) for those with more than $1 million annual income. This could significantly affect someone selling a small business.
  4. Raise payroll Social Security taxes for those earning more than $400,000 annually.
  5. Eliminate the step-up in basis on inherited assets. For example, the proposed plan would require an heir selling their parents’ house to pay tax on the difference between the heir’s selling price and the parents’ original purchase price (versus its “stepped-up” value on date of death).
  6. Eliminate the $25,000 exemption for losses on rental income and Sect 1031 like-kind exchanges.
  7. Increase the child tax credit (with lots of complexities).
  8. Provide a tax credit of up to $15,000 for first-time home buyers and low-income renters.
  9. Offer green energy tax incentives for reducing emissions.
  10. Increase the income tax rate on C-corporations to 28% (from 21%) thus reducing shareholder profits.
  11. Reduce the estate tax exemption, requiring more families to pay estate taxes.

As a CPA, I’m already thinking through potential tax-wise moves to make. That said, if Congress decides to seek $3 trillion more in taxes, there may be only so much we can do about it. Unless you plan to make less and own less, you might need to plan to pay more taxes in the years ahead.

 

John A. Frisch, CPA/PFS, CFP®, AIF®, PPC™ founded Alliant Wealth Advisors in 1995 and has over 30 years of experience as a financial professional. In his free time, he’s an avid long-distance runner, a sport that requires discipline, patience and vision. John applies these same skills to his professional pursuits: He helps families and retirement plan sponsors adopt a patient, disciplined approach to overcoming financial challenges and reaching their distant goals along a clear path. Learn more at www.alliantwealth.com.

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