Upcoming elections featuring two presidential candidates with widely divergent views on taxes might be paralyzing clients and causing them to hold off on tax planning. Still, some moves are not only possible, but smart—if they’re done soon enough.

“It isn’t the time to wait,” said Bill Smith, managing director for CBIZ MHM’s national tax offic in Bethesda, Md. “Lots of ideas need planning by year-end and may involve other professionals who will be busy then.”

“We’re in a wait-and-see mode, but it doesn’t mean we should be doing nothing,” said Julia Carlson, CEO of Financial Freedom Wealth Management Group in Newport, Ore. “The goal between now and the election is to position our clients so that the heavy lifting is done and executing the implementation of our advice will be easy.”

“We’re targeting the fourth quarter for tax-planning opportunities to lock in the current low rates for this year where possible,” added Chris Hardy, managing director at Georgia-based Paramount Tax and Accounting.

The election will determine whether there's continuity or change in the nation's tax laws, advisors noted.

“If there’s a split between the White House and Congress, there’s less of a chance the president’s tax program will be fully adopted and far more likely that the current tax law will remain intact until [tax reform’s] sunset,” said Louis Sands, a CPA and partner at Sikich in Naperville, Ill.

“The tax law is unlikely to be different in 2021, but legislation could be passed to impact 2022 and moving forward if there’s a Democratic sweep,” added Philip “Rusty” Ross, a CPA and senior wealth advisor at Exencial Wealth Advisors in Oklahoma City.

Biden proposes a top tax bracket of 39.6% for ordinary income in excess of $400,000. “In response, many firms are accelerating income and paying bonuses in 2020,” said Gail Rosen, a CPA in Martinsville, N.J.

Biden also proposes hiking the tax rate on long-term capital gains and qualified dividend income for taxpayers with income exceeding $1 million. “For taxpayers at this income level, if they sell stock and have $100,000 of capital gains in 2020, they can potentially save $20,000 of taxes rather than under a Biden administration increase,” Rosen said. “Trump is proposing lowering the top capital gains rate from 20% to 15% and he’s spoken about indexing capital gains for inflation.”

Biden has also proposed to disallow like-kind exchanges and prohibit real estate investors with income exceeding $400,000 from using real estate losses to offset other income.

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