Joe Biden’s Tax Plans: What Is There For The Expats To Know?
After a tough electoral fight between Donald Trump and Joe Biden, the latter has been confirmed as the president-elect by the Electoral College. With Joe Biden now all set to take the oath of the new President of the USA along with the Vice President-elect Kamala Harris on 20th January 2021, the taxation regime of the United States of America is expected to experience some of the major changes in the near future. The Biden administration is expected to be more stringent and heavier in terms of the imposition of the taxes. Many rounds of debates are going around between the leading financial consultants and the economists across the American continent, therefore, US Tax consultants in Toronto and Corporate Tax consultants in Toronto are keeping a close watch on the developments in the US’s political ecosystem.
Key Highlights Of Joe Biden’s Tax Plans
It is highly likely that the majority of the tax reforms will be reversed by the Joe Biden-led administration. Joe Biden is of the opinion to refrain the people and companies of his country from providing employment overseas to sell the products and services developed back in the USA. Thus, key highlights of the taxation led counter steps are as mentioned below-
- Income tax bracket to go up to 39.6% from the present 37%.
- The estate and gift tax are expected to grow from 40% to 45% and the exemptions on the same are likely to fall from $11.58 million to $3.5 million.
- The Child Tax Credit might be increased from $2,000 to $3,000 such that the entire credit will be refundable against that of the currently refundable amount of $1,400. Thus, expat parents who have to pay foreign taxes and get rid of their US tax liability by claiming the Foreign Tax Credit can now receive an amount of $3,000 per child refund each year.
- The corporation tax which was reduced from 35% to 21% in the year 2017 Tax Cuts and Jobs Act is again expected to be raised to 28%.
- The Foreign Account Tax Compliance Act (FATCA) which was brought into force in the year 2010 under the Vice-Presidentship of Joe Biden is also likely to stay.
- Under this tax law, the Internal Revenue Service (IRS)can enforce US tax compliance on its citizens across the globe.
- The discount of 50% Global Intangible Low Tax Income (GILTI) is expected to be removed by Joe Biden. Thus, every American-owned foreign will have to pay a tax of a complete 21 percent.
Of course, the surety of implementation of the above-mentioned proposed taxes by Biden can only be ascertained once he takes the oath of the President’s office. However, it is indeed advisable for US citizens to seek advice from the tax consultants to bolster their financial planning and avoid defaulting on paying their taxes to the US Government.
Source:
https://brighttax.com/blog/us-election-biden-tax-plan-expats/
https://www.taxesforexpats.com/articles/expat-tax-rules/biden-tax-plan-analysis.html
https://www.myexpattaxes.com/expat-tax-tips/biden-tax-plans-us-expats/
https://neotax.eu/en/expats/blog/the-implications-of-the-2020-u-s-elections-on-expat-taxes
