I covered changes to the Estate and Gift Tax system in an earlier post titled Estate Tax Law Changes - What To Do Now with the assistance of my colleague, Brandon Ketron, and now we are back again to cover proposed income tax changes. Income Tax Rate Increases and Rate Bracket AdjustmentsOne of the most discussed propositions is the increase in income tax rates, bringing individual tax rates to 39.6% for ordinary income. In addition to the tax rate increases, the rate brackets will also be adjusted and those on the upper end of the 32% and 35% rate brackets may see a tax rate increase as a result. Add that to a 13% state income tax for a California resident and the tax rate is close to 60%. Small Businesses Will Pay More Taxes In 2022The bill would also change the 21% flat corporate income tax on ‘C Corporations” to an 18% tax on the company’s net income of up to $400,000, a 21% tax on net income up to $5,000,000, and a 26% tax on net income in excess of $5,000,000.

Source: Forbes September 16, 2021 22:18 UTC