The upcoming presidential election holds huge implications for every aspect of our daily lives. Pandemic response and public safety are currently chief areas of concern, but potential changes to the IRS are also worth considering. It’s impossible to know how, exactly, the IRS will be handled under a possible Biden administration, but we can look to his latest proposals for clues.
For most taxpayers, the chief concern about a possible Biden administration IRS involves future tax rates. Few are willing to see their individual tax burden increase, especially if they’ve received breaks under the Tax Cuts and Jobs Act (TCJA).
Currently, Biden only intends to repeal TCJA provisions for those who earn over $400,000 per year. He insists that those who fall short of this income threshold will not be expected to pay additional taxes.
In addition to maintaining current tax levels for most Americans, Biden claims that he will increase some tax breaks. For example, he has committed to temporarily raising the child tax break to either $3,000 or $3,600 per child, depending on age.
Biden has also proposed offering access to the work opportunity tax credit for military spouses and developing new tax breaks for small businesses that provide retirement benefits for their employees.
New Tax Penalties
In an effort to keep more jobs in America, Biden hopes to implement an offshoring tax penalty, accompanied by a credit for companies that create new opportunities for the nation’s struggling workforce. Furthermore, Biden intends to implement a plan involving a 15 percent minimum tax for corporate domestic profits. This could increase revenue but may also limit flexibility for some companies.
No matter how you vote or who wins the election, you’ll benefit from working with an enrolled IRS agent who understands the implications of either scenario. At the Highland Tax Group, we’re prepared to help you make the most of the situation at hand. Contact us today for further insight.