There are a lot of questions about the Build Back Better plan and potential tax law changes, including an adjustment to capital gains taxes.
One of the proposals Congress is considering sets the top rate for taxing capital gains at 25%, up from 20% under current law. Another would raise the capital gains tax rate to 39.6% for taxpayers earning $1 million or more. Still another would make the change to capital gains tax retroactive, with a start date of April 2021.1,2
At this point, many ideas are being considered as legislators look for ways to raise revenue to help pay for the Build Back Better plan. Corporate tax rates, individual tax rates, estate tax rules also are on the negotiating table.
Although the outcome is currently uncertain, it looks as if there will be tax increases in the future. Our advice is to be proactive. Realizing capital gains and Roth conversions are just two of the topics we are currently discussing with our clients.
This article is for informational purposes only and is not a replacement for individual advice, so make sure to consult your tax, legal, and financial professionals before modifying your financial strategy.
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