5 Ways President Biden’s Tax Plan Could Impact Your Finances

Attorney and Advisor Chris Berry discuss the possible impact of President’s Biden Tax Proposals on your Finances in this episode of Daily Wisdom.

Estate Attorney and Advisor Chris Berry of Castle Wealth Group answers questions on retirement and estate planning every Wednesday at 1pm. Register via this link or give our office a call at 844-885-4200.

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Episode Transcript

New President’s Tax Proposal

Hey, this is Chris Berry with Castle Wealth Group. And today we’re going to talk about five ways President Biden’s tax plan could impact your finances. And if you like this information, please make sure to subscribe to our channel, make sure to turn on notifications, and make sure to comment down below.

Christopher Berry is a leading estate attorney and advisor in the area of retirement and legacy planning. He has been featured in publications, such as Forbes, Kiplinger’s, Crain’s Detroit, and more. He’s the host of the weekly radio show and podcast, The Chris Berry Show. He’s a national thought leader as it relates to retirement and legacy planning and has authored the Amazon best-selling book, The Caregiver’s Legal Guide.

We’re going to talk about the new president’s tax proposals and five ways that his tax proposals may affect your finances. The first thing is he has ran on a platform of repealing the Tax Cuts and Jobs Act. So, President Trump passed the Tax Cuts and Jobs Act in 2018. It’s supposed to run from 2018 ’till 2025. Well, President Biden ran on a platform of repealing the Tax Cuts and Jobs Act. And so what that will do, is across the board, the first thing it’s going to raise marginal tax rates at least 3-4% across the board. So if you’re at the 12% tax bracket, it’s going up to 15. If you’re at the 22% tax bracket, it’s going up to 25 or 28. And so across the board, your tax rates are going to rise.


How It May Affect Your Finances

The second way that it’s going to affect your finances, is he’s proposed getting rid of step-up in basis. This is a complicated idea, and this is what I call a stealth tax. But when you pass away in any taxable account, you get what’s called a step-up in basis. So, if you bought something for a hundred thousand, you pass away, it’s at 200,000, then the kids sell it for 210. They don’t have to pay $110,000 worth of gains. They only have to pay 10,000 from the date of death until when they sell it, that’s called a step-up in basis. He has ran on a proposal of repealing or getting rid of step-up in basis, which would be a form of inheritance, or estate tax on individuals, regardless of the size of their estate.

The third proposal is to lower federal estate taxes. So right now, if you pass away, you have a estate tax exemption of $11 million, where as long as you die with less than $11 million, you owe zero in estate taxes. That’s not counting the step-up in basis issue. This is an inheritance tax. This is another tax on top of the step-up in basis, if you have less than $11 million. Well, Biden ran on the proposal of lowering that $11 million exemption to three and a half million. Meaning if you die with more than three and a half million dollars of life insurance, IRAs, Roth money, real estate, business interest, that could be taxed at up to 45%.

The next thing, the fourth thing is he ran on a proposal of treating capital gains as income for those who earn over a million dollars. So, instead of having capital gains, which are at 0%, 15, or 20, now capital gains would be treated as ordinary income, which could be at 12%, 22, 24, 28, 32, 37, or 39% and change. That’d be affecting those making over a million dollars of income.

And then last would be limiting itemized deductions to upper-income individuals, to a max of 28%. A lot of people, a lot of our clients, they take the standard deductions right now. But if you were to itemize, depending on your income limit, that’d be maxed out at 28% of your income, you could itemize. So some interesting things, things that really jump out at me is raising marginal tax brackets across the board. Also, getting rid of that step-up in basis and also lowering the estate taxes. Those are the big things that’s going to affect a lot of families potentially from a tax perspective.



1. Repealing the Tax Cuts and Jobs Act
2. Getting Rid of Step-up in Basis
3. To Lower Federal Estate Taxes
4. Treating Capital Gains as Income
5. Limiting Itemized Deductions to Upper-Income Individuals to a Max of 28%


And so there’s different strategies that you can utilize right now to try to minimize that effect. Certain types of trusts to remove them from your estate tax, certain tax planning strategies to move money from these pre-tax accounts now, while we have a larger tax bracket before those tax brackets shrink, move the moneys to something that can grow tax-free, or move assets from things that are estate tax countable, like Roth’s to things that can be estate tax-free, like life insurance in the right type of trust. So, there’s different strategies available before these proposals become implemented. So, there’s a window of opportunity that needs to be taken advantage of right now. Feel free to reach out to our office, go to our website, castlewealthlegal.com. You can reach out to us directly from there. You can give us a call at 844-885-4200. This has been Chris Berry with Castle Wealth Group, talking about Biden’s tax proposals and five ways that may affect your finances. Thank you so much.

Castle Wealth Group has clients across the nation and helps families plan, protect and preserve what is important by creating a retirement and legacy blueprint.



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