Taxes are going up – are you prepared?

As he promised during his run for office, President Biden is working on a $2 trillion tax increase package for Congressional approval.

Like many things flowing from our nation’s capital, details are unclear – but most experts believe we’ll see an increase in corporate taxes and a doubling of the GILTI rate, with a provision forcing companies to pay the tax on a country-by-country basis. Some believe we will see potential increases in personal income taxes as part of a potential next package.

Our analysts predict that the proposed tax increases will reduce 2022 earnings by more than 6% if enacted as proposed. Experts expect 2022 to see some big earnings numbers, but those predictions don’t currently reflect the drag of higher taxes.

As Wall Street ponders the impact of higher taxes, it’s an excellent time for you to take a look at your financial plan, including your investments. How will higher taxes impact what you own, and is your portfolio balanced well for what’s to come?

There are some who think of taxes, investments, and even retirement as separate silos with different (sometimes conflicting) plans. Times like these – when sweeping changes to the tax code are proposed – are moments to have a comprehensive view of your goals and how your plans align.

Financial planning is a bad area to be influenced by conflicting goals and biases. You’ve heard me speak about financial professionals who may have goals different from your own. I’d also suggest your own biases and emotions may be influencing your financial decisions.

In the midst of these conflicting opinions and emotions, make sure you’re finding a financial professional who can give you a truly independent insight. Find an advisor you can trust – a true fiduciary, one who is a fiduciary 100% of the time – to help you understand and plan for the tax changes that are coming. In addition, if you need tax garnishment solutions, make sure to talk to a tax consultant for professional assistance.