For High-Income Earners And Families, Failing To Plan Is A High-Stakes Gamble
Published Friday, Nov. 20, 2020, 7:30 p.m. EDT
While Las Vegas oddsmakers take bets on non-sporting events, a search of Google won't tell you that the odds of a 12.4% payroll tax hike on high-income earners in 2021 are incredibly high, according to tax and financial experts. Vegas odds on the likelihood of a massive expansion of the estate tax to millions of families are also not readily available, but an overwhelming majority of financial professionals are predicting the estate taxed will be slashed as of January 1, 2021.
According to a survey released today by Advisors4Advisors, a continuing education provider for financial professionals, 67.6% of financial professionals say the odds of a 12.4% hike in 2021 on high-income earners are greater than 50/50.
Assuming the 12.4% payroll tax increase proposed by President-elect Joseph R. Biden does indeed go into effect next year, shifting income into 2020 before the end of the year is an urgent task for business owners as well as doctors, dentists, and other professionals, who are employees.
Meanwhile, 45% of financial professionals surveyed said there's at least a 50/50 chance that the estate tax will be expanded in 2021. The Biden tax plan would expand the estate tax by slashing the $11.58 million currently exempt to $3.5 million. That would mean the estate tax would suddenly apply to millions of families who fail to plan family wealth transfers by the end of 2020.
The Standard & Poor's 500 stock index closed Friday at 3,557.54, falling by a scant -0.68% from Thursday and -0.77% from a week ago. The index is +45.56% higher than its March 23, 2020 bear market low.
The S&P 500 closed at a new all-time high on Monday, breaking its previous high set the last Friday.
Stock prices have swung wildly since the coronavirus crisis started in March and volatility is to be expected in the months ahead.
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