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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%

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