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. 

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