In November 2021, the IRS issued Revenue Procedure 2021-45, which provided inflation adjustments for tax provisions that will be applicable for the 2022 tax year. The IRS calculates these adjustments annually based on changes in the Chained Consumer Price Index.
Individuals who have retired may expect that their taxes will become simpler than they were prior to retirement, with little or no need for tax planning. While in some cases this may be true, often there are new and more complex issues that require careful consideration and consultation with advisors.
With the end of the year quickly approaching, individuals should consider making proactive moves to minimize their tax liability. Tax planning has been made more complicated in 2021 by the fact that a bill is currently working its way through Congress that could result in significant changes to the tax law.
On Sunday, September 12, 2021, the House Ways and Means Committee released a first draft of proposed tax legislation, including several provisions that could significantly impact the estate planning environment. The new tax plan, part of President Biden and Congressional Democrats’ $3.5 trillion budget and spending package, would increase taxes on the wealthy and potentially curtail the use of certain estate planning techniques. While the legislative process may result in modification or even removal of some of the provisions included in the draft legislation, estate planners should consider taking action now before any changes become effective.
Over the last few years, American passport holders have been renouncing their citizenship like no other time in history. During the first six months of 2020, almost 6,000 Americans gave up citizenship – a 1210% increase compared to the prior six months, during which only 444 cases were recorded. Before the current pandemic, these numbers had been in decline. This new trend looks to continue into 2021 as many Americans anticipate the impact of President Biden’s proposed tax reform package.
As 2020 comes to a close, individuals and businesses are looking to carry out their year-end tax planning in a potentially changing political landscape. Although Vice President Joe Biden is expected to be sworn in as president on January 20, 2021 and Democrats have maintained control of the House of Representatives, the Senate remains undecided because of two run-off races in Georgia scheduled for January 5, 2021.
Most Georgia residents have noticed that the state has become a major destination for the film and entertainment industry over the last several years. Known as the “Hollywood of the South,” Atlanta has become a hub for films and TV series, including The Walking Dead, The Avengers and The Hunger Games.
With all eyes on the November election, many are wondering what impact the upcoming presidential and congressional races might have on estate planning. To provide answers, Bennett Thrasher’s Estates & Trusts practice partnered with BT Wealth Management and Djuric Spratt to present, “Estate Planning in an Election Year.”
2020 has been a year of unprecedented uncertainty for many individuals and businesses, with the coronavirus pandemic wreaking havoc on the economy, financial markets, industry segments, financial prospects for individual companies and the valuations of asset holdings. More change could be coming this fall, with an election, the prospect of a new administration on the horizon and the uncertainty of future economic conditions.