Can we help you find something?

Key Takeaways & Insights

A high-level overview of the proposed tax policies of the presidential candidates that could affect businesses and business owners.

DOWNLOAD PDF

  • Work with your advisor to assess the potential impact these policies could have on your enterprise.
  • Evaluate your current business strategy to identify any actions you may want to take before year-end.
  • Create a business plan that can be “switched on” should any of the proposed policies come to fruition.

Tax regulations likely influence many of your business decisions—how to structure your enterprise, where to establish operations, expansion plans and workplace policies, to name a few. Below is a high-level comparison of the proposed tax policies of President Trump and former Vice President Joe Biden that could affect businesses and business owners.

Note: The Tax Cuts and Jobs Act (TCJA) of 2017 included many of President Trump’s tax initiatives—some of which are set to expire in 2025. If re-elected, his primary tax objective will likely be to make these provisions permanent. As such, President Trump hasn’t introduced many new proposals as part of his re-election campaign. But he has offered ideas on several tax topics, which we’ve incorporated into the chart. More information about his policies may be released at a later date.

Additionally, the information in this chart is current as of of the date it was written and and is subject to change without notice. There are no guarantees that any of the proposals will be enacted into law regardless of the election outcome.

President Trump
Current Tax Law
Former Vice President
Joe Biden
Corporate Tax Rate
Maintain current rules21% tax rate

No alternative minimum tax

Raise rate to 28%

Restore alternative minimum tax on corporations with book profits of $100 million or more

Qualified Business Income Deduction
(Section 199A deduction)
Extend current deduction limits set to expire under TCJA20% of eligible taxpayer’s qualified business income plus 20% of qualified real estate investment trust dividends and qualified publicly traded partnership incomePhase out the deduction for taxpayers with more than $400,000 in income
Business Tax Deductions & Depreciation
Extend the 100% bonus depreciation

Maintain the deduction for research and development expiring in 2021

Create new deductions for small businesses, restaurants and the tourism industry

100% bonus depreciation for qualified property acquired and put in service between September 27, 2017 and December 31, 2022

Residential rental property depreciable over 27 1/2 years

Commercial and industrial property depreciable over 39 years

Increase the depreciable life of rental real estate

Eliminate like-kind exchanges for real estate under Internal Revenue Code Section 1031

Create incentives to encourage Opportunity Zone Funds to partner with nonprofit and community organizations

Retirement Plans
No proposed changes to 401(k) plansPretax participant contributions that are taxable upon withdrawal

Tax-deductible employer contributions

Replace the upfront tax breaks with flat-tax credits (referred to as “equalizing” 401(k) plans)

Expand access to automatic 401(k) plans for individuals not currently covered by a plan at work

Social Security Payroll Taxes
Forgive 100% of Social Security payroll
taxes deferred from September 1, 2020 to
December 31, 2020
12.4% tax that is split between employers and employees

No Social Security payroll taxes on wages above $137,700

Subject wages below $137,700 and above $400,000 to Social Security payroll taxes
Energy Tax Incentives
No proposed changes to the incentivesTax credits for oil and “green” energy (solar, wind) productionRepeal fossil fuel subsidies

Expand incentives for residential and commercial energy efficiency

International Taxation
No proposed changes to the current rulesDeferral of taxes of offshore subsidiary profits until the funds are repatriatedRepeal TCJA incentives for multinational companies

Claw-back public investments and tax benefits when a company closes U.S. locations and moves operations overseas

 

Planning for Year-End and 2021

Our tax planning specialists and business advisory group have extensive knowledge of federal and state tax laws. They can help you evaluate your current business strategy and create a plan that can be “switched on” if any of the above proposals come to fruition. Contact a Cerity Partners advisor to learn more.

View comparison of proposed tax policies for individual taxpayers.


Meet the Author

Erica Cameron

Partner

Erica is a Partner in the Cleveland office. She advises individuals, families, businesses, and nonprofits providing comprehensive wealth management services.

Prior to joining Cerity Partners, Erica was a Vice President, Portfolio Manager and Director of Operations at Spero-Smith Investment Advisers, which she joined in 2004.

Erica earned a Bachelor of Business Administration degree from Ohio University with a concentration in Finance and Management Information Systems (MIS), and a Masters of Business Administration in Finance from John Carroll University in Cleveland, Ohio. She is a CFP® professional and a member of the Financial Planning Association (FPA).

Within the Cleveland-area community, Erica is a member of Women for Economic & Leadership Development (WELD) and serves on its leadership team as the chair of the impact committee. She serves on the Associate Board of the Greater Cleveland Sports Commission and the Alumni Committee of the Cleveland Leadership Center. She is a graduate of the 2013 class of Bridge Builders program of the Cleveland Leadership Center.

Connect with Erica

Steve Walker

Partner

He is a Partner in the Orange County office. He has more than thirty years of experience in tax and accounting, providing comprehensive tax planning, tax compliance, and transactional consulting services. He has served a variety of businesses throughout his career; however, his professional focus and technical expertise focus on entrepreneurial companies and high net worth individuals. Additionally, he has significant expertise in the real estate industry. Steve leads the Tax Practice and is a member of the Executive Committee.

Prior to joining Cerity Partners, Steve was the founder and managing partner of The Walker Company, LLP, a full-service tax and consulting firm located in Irvine, CA. The Walker Company was frequently hired as a consultant when business owners encountered situations where creative solutions were needed. Much of his career was spent in the Orange County offices of Kenneth Leventhal & Company. During his tenure at Kenneth Leventhal & Company, Steve functioned as a national resource in the areas of partnership taxation, troubled debt restructures and business entity structuring. He left Kenneth Leventhal & Company in 1994 to become the partner in charge of the tax practice of Haskell & White LLP, a large Southern California regional accounting firm.

Steve has a Bachelor of Science in Business Administration with a concentration in Accounting from the California Polytechnic State University at San Luis Obispo and is a member of the American Institute of Certified Public Accountants and the California Society of Certified Public Accountants.

Connect with Steve

Brett Dearing

Partner

Brett Dearing is a Partner and Exit Planning Specialist in the New York office with almost thirty years experience working with privately-held businesses and business owners. Brett assists business owners in working through the complexities of transitioning a family business, structuring comprehensive succession plans and growth planning. His specialization is preparing a business and business owner for transaction while maximizing enterprise value. He also assists his clients with mergers & acquisitions, recapitalizations, private equity purchases, strategic acquisitions, spin-out acquisitions, tuck-in strategies, ESOP’s and company valuation & analysis.

Before joining Cerity Partners, Brett worked as an outsourced Chief Operating Officer. He also served as Senior Director at BNY Mellon, a Senior Vice President at Goldman Sachs and Managing Director at AllianceBernstein. He was responsible for actively consulting with over 1,000 financial advisors across the United States on investment strategy and client engagement for privately-held businesses. Brett has worked closely with family offices, various hedge funds, REITs, and private equity firms to set up investment and operational infrastructures.

Brett received his degree from Indiana University of Pennsylvania. He is the founder and President of the Business Owners Exchange (BXO), a boarded member of the Exit Planning Exchange New York Chapter (XPX). Committee Chair of The Alliance of Mergers & Acquisitions Advisors™ (AM&AA), and committee member of the Member- Exit Planning Institute (EPI) and the National Association of Securities Professionals (NASP).

He is a frequent speaker at events focused on educating and preparing business owners for the sale of their business.

Connect with Brett

Sign Up for Market & Economic Outlooks

Get the latest insights and analysis from our investment team delivered right to your inbox.