President Biden’s Build Back Better plan and potential tax law changes has raised some questions.  If you turn on the news, it’s hard to go one broadcast without hearing speculation about it.  One of the main talking points is “Will there be an adjustment to capital gains taxes?”

There are a number of proposals that we have heard about. 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.  We unfortunately won’t know anything definitive until the bill is passed. 

While it is not ideal, the best approach is to wait and see. It would be hasty to make any portfolio changes based on current discussions. If a current event or headline has caused you to reconsider your financial strategy, please give us a call.  While we don’t make changes strictly based on headlines, sometimes the headlines nudge someone to review their overall picture.

So please, reach out if you have any concerns about capital gains taxes or taxes changing in general.  I have mentioned this in previous blogs, but it bears repeating.  If the headline, whatever it may be, does not change the specifics of your financial goals than I would be hesitant to react hastily to the news.  Remember these three questions.  Does this specific news change 1) when you want to retire 2) the amount needed in retirement monthly 3) your ability to stay on your current plan?  If one of those questions is answered yes, then a review is crucial. 

It can be challenging to wait for Congress to act, and you may feel a bit helpless with so many pending proposals. We may be able to offer some insight that addresses your most pressing questions.  Reach out to us for a discovery call and we can address any concerns that you may have.

1-05206339