3. Lower tax rates
Now is an opportune time to plan while the federal estate exemptions are still high and income tax brackets are lower. As planned today, the Tax Cuts and Jobs Act will “sunset” in 2026, changing:
• The top marginal income tax rate reverts to 39.6%
• The estate and gift tax exemption amount reverts to $5 million, indexed for inflation
This could happen sooner than 2026, should legislation be passed.
4. Uncertain legislative environment
The Build Back Better Act that was heavily debated in 2021 has not passed; the Tax Cuts and Jobs Act (TCJA) is sunsetting; and other proposed changes could be in the works. Past proposals give us insight into potential changes lawmakers could consider and propose again in another bill. What could happen in the future? What could be taken away? How can you prepare now?