Tom Wheelwright, CPA and CEO of WealthAbility®, held a virtual Town Hall event to discuss the state of taxes and answer viewer questions regarding the new stimulus bill, President-elect Biden’s tax proposals, and more.

“This is a tumultuous time in the United States,” Wheelwright said. “In our work with business owners and investors, we’ve discovered that there is a lot of confusion related to the new federal economic stimulus package and the tax policies of the incoming Biden administration. Our goal is to share educational information about what we expect from a tax and economic standpoint.

The following is a recap of the Town Hall conversation highlights, which included a Q&A with participants. A full replay is available on YouTube.

Who’s Winning, Who’s Losing



It’s a challenging time from an economic standpoint as well as from a health standpoint. We have lots of people who are unemployed and businesses that are struggling. We have shutdowns happening and people who are afraid of going out.

The people who are winning are the people who are adapting. The people who are not are being left behind.

At WealthAbility®, we’re all about entrepreneurship. We’re about you taking control of your life and your financial situation. Let’s not be reliant on the government. Let’s not be relying on other people. Let’s not even be relying on employers. It’s entrepreneurship that really gives us the energy that we need in this world today.

It has never been this easy to start a business. We have tools that are practically free; a lot of information is free. On top of that, we have customers that are being given money from the government to spend, and the government wants them to spend it. So, there’s no reason we shouldn’t be successful right now. We just have to adapt, get educated and take responsibility for ourselves, and help others.

In addition to the direct stimulus checks to many consumers, the recent round of federal economic stimulus provided three significant boosts for business owners. They are:


1.More PPP. Business owners have lots of opportunities within the Paycheck Protection Program. First, loans issued under the program are not taxable, and the qualified expenses you pay from the loan proceeds are fully tax-deductible. Second, there is plenty of funding available for business owners who need an additional loan. If you qualify for a PPP loan, you should take it. Don’t give up free money.

2. Meal deduction. In 2021 and 2022, business meals are 100% deductible. To qualify, meals must have a business purpose, be an ordinary expense (meaning their amount and frequency is typical in your industry), be necessary, and be documented.

3. Expanded charitable deductions. Normally, individuals can only deduct up to 60% of their income in the form of charitable donations. For contributions made in 2020 and 2021, this has been increased to 100%. This will be particularly attractive to those who have investment income or non-taxable income and are in a position to make sizable charitable contributions.

What’s Next



As a general rule, taxes are not going down in the next two years. This is why now more than ever, it is essential to have a tax strategy in place. Your tax strategy is a plan of action that puts you in a position to keep as much of your hard-earned money as possible.

That said, there’s no reason to panic. Any changes won’t be immediate, and the Democratic control in Congress is narrow. The House has a 10-person Democratic majority, and the Senate is an even split. Most tax bills require a 60% vote, giving individual Representatives and Senators a lot of power to influence legislation. Here are three changes to watch:

1.Rate Increases. There has been a lot of talk about increasing tax rates, but many of the possibilities are unlikely. An increase to the estate tax or the corporate tax rate, for example, will be challenging to pass and won’t generate substantial new revenue. Eliminating 1031 exchanges also seems unlikely. No one has a crystal ball, of course, so work with your tax advisor and estate planner to monitor all tax rates.


What is far more likely is that we will see an increase in the tax rate on annual income over $400,000. For every client with whom we work, we are targeting that they do not have taxable income over $400,000. Is that legal? It is when you follow the tax law and understand the tax law.

2.New Incentives. Lawmakers often make changes to tax incentives, removing or reducing some and adding others. One of the areas where we anticipate seeing new opportunities is in the field of clean energy and climate control. Work with your tax advisor to evaluate these new incentives to see if investments in these areas may be a good fit for your tax strategy.

3.Potential Deduction for State Taxes. Remember that the new Senate Majority Leader Chuck Schumer is from New York and House Speaker Nancy Pelosi is from California, two high-tax states. They have been pushing for state taxes to be deductible on federal returns.

Frequently Asked Questions


My W2 income is above $400,000. Can you still bring it below $400,000 legally?



Absolutely. For example, if your W2 income was $500,000 and you invested $100,000 in oil and gas, you would get a $100,000 deduction. Now, it’s easiest to apply this type of tax incentive when you’re either a professional investor or a business owner. It’s much more difficult if all of your income comes from W2 wages, but it’s not impossible.

Does the $400,000 target mean the amount over$ 400,000 is taxed incrementally over that amount, or once you hit the $400,000, your total income is taxed at the new bracket?



This is a really terrific and astute question. We have what’s called a graduated income tax rate in the United States. What that means is that everybody in the U.S. has a 0% tax bracket, a 10% tax bracket, a 12% tax bracket, and so on. We don’t lose the lower tax brackets as our income increases. Even Warren Buffett has a 10% tax bracket; it’s a very small amount of his overall income, but he’s got a 10% tax bracket.

TOM WHEELWRIGHT is a CPA, Global Tax Strategist, Educator, Entrepreneur and CPA, who is sought-after as both a tax expert and successful business leader. Wheelwright is CEO of WealthAbility®, Best-Selling Author of “Tax-Free Wealth”, Owner and Active CPA for Wheelwright Manahan, Speaker, and Host of 2 popular podcasts, including The WealthAbility® for CPAs Show. Wheelwright advises CPAs, accounting professionals, small business owners, entrepreneurs and investors how to permanently and legally reduce their taxes by 10-40%. Previously, Wheelwright was a Manager in the National Tax Office of Ernst and Young, Adjunct Professor in the Masters of Tax Program at Arizona State University for 14 years, and Fortune 500 in-house tax advisor and tax lobbyist. And Wheelwright has been a contributor and source to The Tax Advisor, The General Partnership of Taxation, Taxation For Accountants, Taxation for Lawyers, and Tax Notes. He is also a regular tax contributor to Entrepreneur Magazine, Accounting Today, The Wall Street Journal, National Public Radio, Marketplace, Fox and Friends, ABC News and many more media.

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