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The political standoff in Washington, D.C., has complicated tax planning enormously. No one knows exactly how it will shake out but what we do know is that there are four possibilities to be prepared for.

1. The estate tax exemption is expected to be slashed dramatically, from $11.6 million, to $3.5 million per person, most likely. In addition, the estate tax rate could be stiffened.

2. Capital gain taxes could be hiked in a couple of ways. The current favorable capital gains tax rate of 20% could be eliminated if your taxable income is more than $1 million. In addition, the “step-up” in the basis accorded capital gains on inherited investments may be eliminated on gains of more than $1 million. If your current estate plan hinges on leaving highly appreciated assets, like stocks, business interests, real estate, and other investments, this would slash what your heirs inherit after paying taxes.

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3. President Biden has proposed raising the top tax rate. In 2021, the top tax rate is 37% and that applies to income of more than $628,300 for joint filers. A new 39.6% income tax bracket is very possibly going to be adopted. Not only would the top tax rate rise to 39.6%, but the 35% tax bracket could be eliminated, which greatly expands the number of taxpayers subject to the 39.6%.

4. The value of itemized deductions could be capped at 28% for those in the new top tax bracket. To be clear, a high-income professional or business owner in the proposed 39.6% tax bracket, who deducts mortgage interest, would be entitled to a deduction of only 28 cents for each dollar paid in mortgage interest, instead of 39.6 cents on the dollar. Itemized deductions would lose 30% of their power in lowering your tax bill annually.

The matrix of variables is complex but keeping these four possible changes top of mind could significantly help minimize your federal income and estate taxes as tax-hike possibilities turn into certainties in the weeks ahead.