Biden Revenue Tax Calculator vs Trump Tax Plan – Forbes Advisor

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President-elect Joseph Biden campaigned for a promise to raise taxes for wealthy Americans and businesses. His key tax proposals will increase taxes for those earning more than $ 400,000 a year and increase corporate tax rates from 21% to 28%.

And while his tax plan will have an impact on the bottom line of the richest Americans, low- and middle-income households can benefit from increased tax credits.

To understand how Biden’s tax plan could affect your taxes, use the calculator below to help determine how much you could pay under the President-elect’s tax plan.

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Child and dependent care expenses

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Tax Contributions & Deductions

Under Biden’s proposed tax plan, you’ll pay $ 5,600 more than under the current federal tax plan under Trump

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Comparison of both tax results

European summer time. Federal taxes

European summer time. Federal refund



  • Your federal marginal tax rate remained at X%
  • Your effective tax rate is now x% (previously y%).

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Disclaimer: This tool is for educational purposes only and should not be used for tax preparation purposes. Your actual tax payment or refund may vary based on several factors. For the sake of simplicity, certain deductions and credits are omitted from this tax calculation. We recommend that you seek advice from a tax advisor to determine how changes in tax codes would affect your financial situation.

Will the federal tax brackets change?

Individuals earning more than $ 400,000 per year will experience a significant change in Biden’s tax plan. According to the Tax Policy Center, if you earn $ 790,000 or more, expect an average payment of 16% of after-tax income. In addition, the tax rate for the top tax bracket will increase from 37% to 39.6%.

If you earn more than $ 1,000,000, the long-term capital gains tax rate, which is a special tax levied on assets held for more than a year, increases. Finally, Biden is proposing a 28% tax cap on individual deductions and the abolition of the qualified business tax deduction for those earning more than $ 400,000.

What happens to tax credits?

Biden has no plans to levy taxes on low to middle income taxpayers. However, this group can expect changes in certain tax credits, which means they may have more cash in their pockets. These tax credits include the child tax credit, the child and dependent care tax credit, and the earned income tax credit. Biden also plans to introduce a retirement tax credit for those saving on a tenant’s 401 (k) plan, and reintroducing the homebuyer tax credit.

frequently asked Questions

In what year can we expect changes?

While this calculator assumes that Biden’s tax policy will take place in tax year 2020, it is unlikely to happen – and the jury isn’t sure if a new tax bill will be passed in time for tax year 2021. The Fate of Biden’s Tax Proposal will depend on whether it can pass a new tax bill through Congress. President Donald Trump ran on a platform that included major tax cuts, but he was in office for nearly a year before his signed tax law, the Tax Cuts And Jobs Act (TCJA), was passed.

What are the proposed tax rate changes for 2020?

There are no tax rate changes in 2020.

If Biden’s tax policy passes, it will not make many changes to the parentheses that existed under the TCJA, but will replace the top tax bracket, increasing the tax rate for those who earn more than $ 400,000 a year from 37% to 39, 6% changes.

What are the proposed changes to child tax credit under Biden’s Tax Plan?

Under applicable law, a taxpayer can claim a child tax credit of up to $ 2,000 for qualified children under the age of 17. This credit is a refundable credit of up to $ 1,400. If the tax credit is more than the tax owed, the taxpayer may expect your money back. This credit expires for anyone earning $ 200,000 or more ($ 400,000 for married couples filing together).

Biden’s tax proposal aims to increase the child tax credit for eligible children from $ 2,000 to $ 3,000. Those who have children under the age of 6 will receive an additional $ 600. Biden also suggests a full refund of the balance without expiry.

What will change with the child and care loan?

According to current law, a taxpayer can claim the credit for child and care needs for qualified expenses for care needs. Taxpayers can deduct $ 3,000 ($ 6,000 for two or more dependents) from the cost of dependent care on their federal income tax return.

The dependent must be under the age of 13, a spouse or other eligible person unable to support themselves. The tax credit allowed depends on the taxpayer’s income.

Biden’s tax proposal aims to increase qualified child and long-term care expenses from $ 3,000 to $ 8,000 ($ 16,000 for two or more dependents).

Calculator methodology

The main purpose of this calculator is to compare Biden’s top tax proposals with the current tax law to show the expected tax changes. It does not compare any other income, deduction, or credit that is expected to remain unchanged even if Biden passes a new tax law. This calculator and its inputs are based on information from the current tax law (the 2017 tax cuts and employment laws), the tax brackets forecast for 2020, and the core guidelines proposed by Biden as follows:

Biden’s main tax proposals

  • Increase in tax rate from 37% to 39.6% for households earning $ 400,000 or more;
  • Child tax credit increased from $ 2,000 to $ 3,000 ($ 3,600 for those under 6 years of age);
  • Child and Care Loan Increase from $ 3,000 to $ 8,000 per dependent ($ 6,000 to $ 16,000 for multiple dependents); and
  • For households earning more than $ 400,000, deductions are limited to 28%.

Limitations of this calculator

  1. The estimated taxes or planned refunds do not take into account EITC Tax Credit, additional Medicare taxes levied on high-income individuals, capital gains taxes, or self-employment taxes, which may affect your tax position.
  2. The child and care credit does not take into account relatives and spouses who are physically or psychologically incapable of looking after themselves for more than 13 years.
  3. We have changed the tax brackets for 2020 to reflect Biden’s tax proposals. For single people and heads of household, we’ve adjusted the 35% tax bracket to reflect the $ 400,000 income limit. For couples filing together, we’ve adjusted the 32% and 35% tax brackets to reflect the upper income limit of $ 400,000. For all taxpayers, we’ve replaced the 37% with Biden’s proposed 39.6% tax increase for income over $ 400,000.