Wood Financial Group

Our Business Is Your Tomorrow

  • Home
  • About
  • Team
  • Services
  • Blog
  • Contact

Income and Estate Tax Planning in 2021 under the Biden Administration

February 8, 2021

Following the 2020 general election and Georgia runoffs the Democratic Party has won the Presidency, maintained control of the House of Representatives, and ended up in a 50/50 split with Republicans in the Senate. A 50/50 Senate split means Vice President Kamala Harris will cast any tie-breaking vote, to the extent a filibuster does not apply, essentially giving Democrats voting control over Senate legislation. This makeup of Congress and the Presidency means the likelihood of enactment of new tax legislation soon is high.

Income and Estate Tax Planning in 2021 under the Biden Administration

How can Democrats pass such legislation without 60 votes to overcome a filibuster?

Under current Senate rules, a filibuster cannot be used for budget reconciliation acts, under which tax legislation can be passed, so Senate Democrats only need a simple majority with the tie-breaking vote of Harris to send such legislation to President Joe Biden for approval. It is therefore important to understand both President Biden’s and the Democratic Party’s recent tax policy proposals since there is a strong possibility of them coming to pass during Biden’s first 24 months with unified control of the Federal Government.

Why act now when no new legislation has been put forth?

Congress has the legal authority to enact tax law changes with retroactive effective dates. Many commentators believe that the chance of a retroactive effective date is low but that it could be more likely to occur with estate tax law changes than income tax. Although the timing and extent of tax law changes is uncertain, beginning or continuing to plan now will increase the ability to take advantage of certain tax laws and techniques that might soon become less favorable or vanish. However, precautions should be taken and flexibility incorporated to address the potential impact of retroactivity so clients can make informed decisions on whether to proceed given the uncertainty and be able to change course to the extent possible if necessary.

Due to the high probability of tax-reform within the first 24-months of a Democratic-controlled Federal Government, high-net worth, high-income, and business clients are urged to consult with their tax, legal and financial advisors to consider the impact of possible new tax laws and begin or continue to plan accordingly and immediately.

Securities offered through Lion Street Financial, LLC (512.776.8400), member FINRA, SIPC. Lion Street Financial, LLC and Lion Street Financial LLC is an affiliated company and do not provide tax or legal advice. Representatives may transact business, which includes offering products and services and/or responding to inquiries, only in state(s) in which they are properly registered and/or licensed.

This site is published for residents of the United States only. Representatives may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed until appropriate registration is obtained or exemption from registration is determined. Not all of services referenced on this site are available in every state and through every advisor listed.

Client Relationship Summary (Form CRS)
Lion Street Financial

Check us out on BrokerCheck

Wood Financial Group logo

Wood Financial Group, LLC
2003 Cahaba Road, Suite 201
Mountain Brook, AL 35223

Call Wood Financial Group at (205) 871-2883    Connect with Wood Financial Group on LinkedIn Subscribe to WFG's Newsletter

© 2022 Wood Financial, LLC All rights reserved. | Web Design by dandelion marketing LLC