(WGGB / WSHM) – We have been in President Joe Biden’s administration for nearly a week and major changes have already been made to the policy introduced by former President Donald Trump.
It’s that time of year when taxes are the brains as the 2020 filing season officially opens on February 12, but with a new President in the White House, many are wondering what changes might come.
“There are some aspects of tax law that he intends … the government intends … to change,” Paul Federici said with Burgess, Schiltz and Robb.
Federici told Western Mass News that none of President Biden’s proposals are set in stone right now, but we have a pretty good idea of what might lie ahead based on his election promises.
“During the campaign it was discussed that the higher wage earners will pay more taxes, so it is proposed that the top tax rate – from what I’ve read – be raised from 37 percent to 39.6 percent for anyone over $ 400,000 earned. Obviously this is a big win … Another thing suggested is an increase in the capital gains tax rate for people who earn more than $ 1 million. The tax rate on capital gains was 20 percent and will now increase to 39.6 [percent] to correspond with the tax rate … For someone in his tax bracket, that makes a big difference. That’s almost twice as much, ”remarked Federici.
Tax increases are also likely for businesses.
“There will be changes. Corporate tax rates are expected to rise from the current 21 percent to 28 percent, ”added Federici.
There are also some new or changed tax refunds the president has discussed, including doubling the child tax credit and adding an incentive for first-time home buyers.
“Another loan that has been proposed is a refundable first-time buyer loan of $ 15,000 for qualified buyers,” said Federici.
As lawmakers begin to discuss these changes, Western Mass News wanted to know whether or not this year’s filing could be affected.
“The tax rates for 2020 and all tax laws are fixed. It’s filing season now, so nothing is going to change … you should never say never … but as far as I know, nothing will change until tax season is registered. Everything that changes should be in 2021 and later, “said Federici.