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Toward the close of each year, we like to provide ideas for year-end moves, as well as items that may be best delayed into the next year. This year is different than any other we’ve seen in a long time! See below to learn why…..
Between COVID and it being an election year, things couldn’t have been much crazier in 2020. The year-end tax planning wildcard lies in the election results, or lack-thereof.
The Biden camp would love to overhaul many of the Tax Reform changes that took place in 2018. However, without full control of all cabinets, many changes would likely be stunted before ever passing.
Here’s where the tax planning stopper comes in…the runoff elections in Georgia scheduled in January 2021 will determine the balance of power in the Senate. If democrats take the Senate, they’ll have less roadblocks to making sweeping tax changes. If republicans win the runoff, significant changes are likely not occurring. So without knowing the Senate results now in 2020, we don’t know what to expect in 2021 with taxes.
That makes it very difficult to plan for the possible major changes we discussed in this article on our site.
With that being said, we’re still big fans of Roth IRA Conversions for those in relatively lower tax brackets currently, as compared to expected future higher brackets. “Bunching” is also another strategy to consider implanting by year-end. You can learn more about that by clicking here for last year’s tax planning article.
Let us know if you have questions regarding your specific situation!