Tax Reform: New Legislative Language Released

Insights | Tax Reform: New Legislative Language Released

Author: Andrea D. Costa, Esq., Vice President of Financial Planning

Tax reform in 2021 continues to be a wild ride. Additional language was released on November 3. According to Finseca, the 2135-page legislation, along with a section by section summary of the legislation, makes several changes to the previously released draft.

Notable for high net worth individuals and their advisors:

  • The originally proposed changes to Grantor Trusts are not in this draft.
  • No changes to Estate Tax Exemptions were included.
  • No changes to the 199(A) Pass Through Deduction were included.
  • The state and local tax (SALT) deduction cap increased from $10k to $72,500 with an effective date after 12/31/2020 and extended through 2031.
  • No further contributions allowed for Roth or Traditional IRA accounts over $10 million with limitations on contributions applying to individuals with income above $400k.
  • New annual reporting requirement for employer-defined contribution plans with accounts above $2.5 million. 

The content of this blog is offered by HORAN Wealth Management, an SEC registered investment advisor. Ms. Costa is an employee of HORAN and a recognized expert in Estate planning but does not manage investment advisory solutions. This information is not intended as legal advice or as a substitute for the particularized advice of your own counsel and should not be relied upon as such, as the advice appropriate for you will be dependent upon the particular facts and circumstances of your situation. The transmission or receipt of this information does not create an attorney-client relationship.  We provide links to other sites that we believe may be useful or informative. These links to third-party sites or information are not intended as and should not be interpreted by you as constituting or implying our endorsement, sponsorship, or recommendation of the third-party information, products, or services found there. Neither the information nor any opinion expressed constitutes a solicitation to use our services or to purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results. Market conditions can vary widely over time and there is always the potential of losing money when investing in securities. HORAN and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only and is not intended to provide and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.