Client Webinar Replay, Biden Tax Plan, and Summit News

Virtual Client Event Replay Available

Thank you to everyone who joined us on our first virtual event with Apollo Lupescu, PhD.  The replay is available on our website and divided into sections for each topic:  Historical Perspective (for dealing with the current crisis), Election Impact on the Market, Behavioral Investing, Climate Crisis Impact on Investing, and Fiscal Stimulus Impact on the Market and the Economy.


Biden Tax Plan

We’ve received several questions about the potential for significant tax changes if Joe Biden is elected President.   Based on Biden’s current tax plan, and understanding that much of this will be negotiated to varying degrees depending on which party controls the House and Senate, here is a summary of possible changes on the table:

Increase of the top ordinary income tax rate to 39.6% for taxpayers over $400,000 income. It is not clear if the $400,000 income threshold will apply to single filers, joint filers, or both. Note: an increase in the top tax rate to 39.6% is already scheduled to occur when the current tax law “sunsets” in 2026.

Elimination of the Qualified Business Income (QBI) Deduction for business owners with over $400,000 income.

Capping the value of itemized deductions at 28%, which would increase the effective tax rate for anyone in the 32% and higher brackets.

Retirement plan deferrals would no longer be a pre-tax deduction but would generate a flat tax credit.The credit, expected to be 26%, favors those in lower brackets (26% credit more valuable than 15% tax deferral) compared to higher brackets where the credit is less than the marginal tax rate. A change of this significance would be challenging to implement.

Income from long-term capital gains and qualified dividends taxed as ordinary income for those with income over $1,000,000.

Elimination of step-up in basis for inherited assets.

50% reduction in the exclusion amount for estate and gift taxes to approximately $5.8 million per person. Note: this is already scheduled to occur when the current tax law “sunsets” in 2026.

The team at Summit is already discussing strategies for clients to consider if Democrats gain control of the White House and the Senate (and retain control of the House), which would make the above changes more likely to be enacted in 2021.


Summit News

Congratulations to Staff Financial Advisor Summer Gillard on her recent marriage to David Anderson in Corolla, North Carolina!  While their original wedding plans were cancelled, they were beyond thankful they still were able to share a beautiful wedding day surrounded by their families!

We also congratulate Kate Coghill for passing the CFP® exam in September.  Passing the CFP® exam demonstrates attaining the knowledge and competency necessary to provide comprehensive personal financial planning advice.

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