“No matter what tax change happens, most of the proposals will not be permanent,” said Chris Hardy, a managing director at Georgia-based Paramount Tax and Accounting. “As we’ve seen in the last several years, the tax code is rapidly changing and that most of the new bills Congress debates have sunset provisions.
“Most of the time we’re asked for suggestions on reducing taxable income. However, with the current rates being so low it may make sense to trigger taxable income now at a lower lever so that it won't be subject to the higher rates at a later time,” Hardy said. “Most tax or financial plans, and especially estate plans, need flexibility. Start considering gifting strategies to implement over the next several years, considering that the lifetime estate and gift tax exemption limits will be cut in half at the beginning of 2026.”
“In 2021, many of our clients rushed to close business deals before any proposed capital gain increases came into effect,” said Gail Rosen, a CPA in Martinsville, N.J. “Now that the Build Back Better plan has become so uncertain, most of our clients are moving along as always. I’d say our clients have become used to uncertainty.”