How Could Individual Tax Rates Change After the Election?November 05, 2020
The election results could impact individual tax rates in a big way. Find out what changes could potentially be in store for individual taxes.
Wondering how individual tax rates could change depending on the results of the 2020 election? You’ll want to check out our Tax Comparison Chart. For now, here’s a sneak peek.
Potential individual tax rate changes
The TCJA temporarily lowered most individual income tax rates and revised the thresholds for each bracket. Currently, the highest marginal effective federal income tax rate is 37%. For 2020, the maximum rate applies to taxable income levels above $518,400 for single people and $622,050 for married people who file joint returns. The current federal income tax rates for individuals will expire after 2025, unless Congress extends them.
Republican nominee Donald Trump’s plan generally supports the GOP sponsored TCJA tax law changes and preserves the current federal income tax rate rules and extends them beyond 2025.
Democratic nominee Joe Biden, on the other hand, supports increasing the top individual rate on ordinary income and net short-term capital gains back to 39.6%. He opposes tax increases for those who make under $400,000 per year.
Learn more about how individual taxes could change depending on the election. As always, we’re here to provide guidance. Check out our 2020 Tax Comparison Chart for more information on how businesses and individual taxes could change in the coming years.