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A Tax And Financial Planning Opportunity Is Closing

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From the perspective of a financial professional, the window of opportunity to act before taxes are hiked is about to close. The plan to end the step-up in basis on inheritances is perhaps the most significant change.

Other tax proposals President Biden campaigned on include a sharp reduction in the favorable treatment on profits from investments, a new top tax rate of 39.6%, and an expansion of the 12.4% Social Security tax on tax-filers who earn more than $400,000 in adjusted gross income annually.

At the time this was written, the details of the new taxes were still unknown. The elimination of the step-up in basis was still an open question but politics were dictating the timeline and dimensions of the tax changes.

It’s possible the tax hikes about to be negotiated in Congress could be retroactive, which would render defensive planning measures fruitless. That’s unlikely, but the window of opportunity to act is closing.

If your annual income is higher than $400,000 or your family has an estate worth more than $3.5 million, please let us know if you have questions.

Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances. The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions. This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.