How You May be Affected by the Tax Proposal called “American Families”

Episode Summary

October 5, 2021 | 00:28:22 | E40

Join all four members of the Expert Team: Nathan Merrill, Karl Frank CFP, Mike Miller CPA and Jeff Krommendyk. We discuss the recent tax plan and how this may affect regular people, not just the billionaires.

Importantly, the proposal has not yet passed Congress so everything is subject to change. 

We discuss a few of the tax increases and losses for individuals. Some of the lost tax benefits include the after-tax Roth contribution, and subsequent Roth conversion. This way to go tax free is made illegal for all people regardless of income by the American Families tax proposal. Most of the rest of the changes affect individuals who make $400,000 or more or families who make $450,000 or more. Income taxes, long-term capital gains both go up. If you make more than $5 million in a year—even if it is from a one-time transaction like selling your family business, farm or the estate—you could face over a 50% tax burden. We talk about the government’s plan to monitor all transactions over a certain dollar amount. We talk about how small business owners face paying the biggest portion of the taxes. The possible loss of the 199A deduction and a 3.8% surtax for small-business owners are two notable examples. We talk about what a person can do at the end of the year to deal with these possible tax increases!