Before we get to the increase in the estate tax exclusion, we should explain how taxes apply to inheritances in a broad sense. Many people assume that you are required to report an inheritance when you file your regular income taxes, but this is not the case. Inheritance is not taxable income for a logical reason. Assets that comprise estates are left over after the decedents paid taxes throughout their lifetimes. For example, if a person saved a certain amount of money every pay period for … [Read more...] about Estate Tax Exclusion Has Been Increased
Do you know that there is a gift tax in the United States? Before you start to get worried about all the gifts that you have received over your lifetime without paying any taxes, it is unlikely that you violated any laws. We have a federal estate tax, but most people do not have to pay it because there is a large exclusion. This is the amount that can be transferred before the tax applies. At the time of this writing in 2019, the exclusion is $11.4 million. Each year there are adjustments … [Read more...] about Understanding the Federal Gift Tax
Since the tax man seems to be involved in every financial transfer imaginable, you may assume that your family will be forced to pay some type of estate taxes. We are glad to be able to tell clients that in fact, most people do not have to worry about this form of taxation. However, those who do are facing a maximum rate of 40% that can have a very serious impact. In this post, we will provide five key pieces of information about death taxes that will give you a basic but broad understanding … [Read more...] about Five Things to Know About Estate Taxes
In Ashland, Kentucky, gifts that you give to others, including your children, are potentially taxable on the federal level. Because of the unlimited marital deduction, you can give unlimited gifts to your spouse free of the gift tax, but gifts to everyone else are subject to the tax. The reason why you generally do not have to write a check is because of the fact that there are gift tax exclusions. First, let's look at the annual per person gift tax exclusion. $14,000 Per Year, Per … [Read more...] about Gift Tax in Ashland: Do I Pay a Tax on Gifts to My Children?
The federal gift tax is unified with the estate tax. There is a $5.25 million unified exclusion in place in 2013 that encompasses all of the taxable gifts that you give along with the value of your estate. In other words, if you gave $5.25 million in gifts that were taxable throughout your life, you would use up this exclusion; and all of your estate would be subject to the estate tax. So giving gifts using the lifetime exclusion is not really in any way preserving your available estate tax … [Read more...] about Higher Tax-Free Transfers Possible This Year
Taxes are controversial, and though most people accept that tax revenue is necessary to support our societal infrastructure, you probably don't want to be taxed at every turn, and you probably don't want to be taxed twice on the same income. With this in mind let's take a look at the federal gift tax. You may not realize that some gifts that you give to your loved ones are taxable. The reason why you don't get a bunch of IRS bills in your mailbox around the holiday season is because there is a … [Read more...] about There’s More To Generosity Than Meets The Eye