Biden Tax Changes

Biden is the president elect - for now, at least, so let’s go over how it might affect small business owner taxes. And it’s not all that good. Pros:

• He wants to create a $60 billion small business fund

• Reduce burdensome regulations for some industries

• Immigration reform - to be able to hire more immigration

• More funding for the SBA

Cons:

• Increase tax rates up to 39.6%

• Get rid of TCJA tax cuts - a lot of write offs will expire

• Increase minimum wage to $15/hour - this will put a lot of biz owners out of biz

• Family medical leave act - 12 weeks paid - as a biz owner, you’ll have to pay for your employees 12 weeks of pay

• Get rid of 1031 exchanges

• Not allow flow-through losses

• Increase capital gains rates from 20% to 39.6%

• No more stepped-up basis

• Lower the estate exemption to reduced from over $11M to 5 million

• Reduced deduction for 401k contribution

• Ban on all inessential non-compete clauses

• Force contractors to employees and pay payroll taxes on all contractors

• Get rid of the 20% QBI deduction (Biden saved over $500 million in the last 2 years with this rule)

• Tax corps at 39% instead of 21%