Our featured article of the month, Are Your Taxes Going to Change?, briefly touches on the pending legislative actions being proposed in DC that may impact your personal finances. As mentioned, this process will likely take months to iron out and may very well never get passed at all. However, the significance of the proposed legislation is such that it is being closely watched by our office and our partners who address our clients’ tax and estate plans.
The implications could be significant and we would rather err on the side of prudence in preparing necessary action in such a case that these proposals make it through in their current form. As mentioned in the briefing, portfolio changes as of right now are not recommended based on an unknown set of new rules. However, we are planning and anticipating the necessary adjustments in case, once again, the legislation does make it through the houses as is.
Wise investors take the “big picture” view.
Most likely, you’ve heard what’s brewing in Washington, D.C., called by one of these names.
The Build Back Better Act. Or the $3.5 trillion budget reconciliation bill. Or the Jobs and Economic Recovery Plan for Working Families.1
Regardless of what name you’ve heard, one fact is clear: It is likely to be months before any action is taken.
When bills are being worked on—especially one that’s this size—it’s a good time to take a quick Civics refresher. Right now, the bill is “in committee” with both the House of Representatives and the Senate. The committees are filling in the policy details and the exact financial figures, which can be a long process.2
It will then be up to the House and Senate to vote on an identical version of a final bill—if both can agree to a final version.2
Right now, it would be hasty to make any portfolio changes based on what’s being discussed and debated. An ambitious investor would have to guess at what policies will be in the final bill, estimate the financial impact, and determine what portfolio changes should be made. That’s a tall order.
So as difficult as it may be, the best approach is to wait-and-see. We work with professionals who are watching every twist and turn. If something starts to take shape, we will evaluate the impact.
We also understand that some of you may have concerns about whether your taxes are going to change. If that’s the case, please reach out. We would welcome the chance to speak with you.
This article is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax, legal, and financial professionals before modifying your tax strategy.
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
1. Forbes.com, August 25, 2021
2. NPR.org, September 14, 2021