They say that no good deed goes unpunished. Most people think that gift giving is a very good thing, but the tax man sees it as an opportunity to take his share. There is a federal gift tax in place, and you should be aware of this tax when you are making financial decisions. Fortunately, there are some gift tax exclusions that allow you to transfer a certain amount before the gift tax would become applicable. One of them is the annual per person gift tax exclusion. You can give up to $14,000 … [Read more...] about What Are the Gift Tax Exclusions?
Taxes
Is Every Estate Subject to the Estate Tax?
When you are looking into the subject of estate planning, you may hear about the federal estate tax and assume that you should be concerned. If you are exposed, you should be extremely concerned, because this death tax carries a 40 percent maximum rate. Fortunately, most people are not exposed to the federal estate tax, because there is a credit or exclusion that is relatively high. The exclusion is the amount that you can transfer before the estate tax would be applicable. It is updated each … [Read more...] about Is Every Estate Subject to the Estate Tax?
Can a Trust Provide Tax Efficiency?
Tax efficiency can be an important consideration when you are positioning yourself financially. This comes into play throughout your life, and it is also a factor when you are planning your estate. Certain types of trusts can be effective to provide tax efficiency under some circumstances, and there are other types of trusts that would not provide tax efficiency. Let's look at the facts. Federal Estate Tax There is a federal estate tax that high net worth families must … [Read more...] about Can a Trust Provide Tax Efficiency?
Do I Pay Taxes When Someone Leaves Money?
Do I Pay Taxes When Someone Leaves Money from Paul Kraft It can seem as though you are required to report any type of income on your annual income tax return. Learn more about income tax in Indiana in this presentation. … [Read more...] about Do I Pay Taxes When Someone Leaves Money?
Is There an Inheritance Tax in Indiana?
Taxes that can come into play when assets are being transferred can be confusing. You have probably heard of the estate tax, and you may assume that an inheritance tax and an estate tax are the same thing. In reality, these are two different forms of taxation. We will look at the distinctions in this post, and we will focus on taxes that can impact Indiana residents. Estate Tax An estate tax would be imposed on the entire taxable portion of the estate in question. Some … [Read more...] about Is There an Inheritance Tax in Indiana?
What Is Capital Gains Tax?
There are so many taxes out there it is hard to keep track of all of them. Without question, you should understand the taxes that can be applicable when you are planning your estate. One tax that can come into play is the capital gains tax, and we will look at the details in this post. Realizing a Gain When you own assets that have appreciated, the capital gains tax is looming. The gains are taxable, but you do not have to pay the capital gains tax until you realize a … [Read more...] about What Is Capital Gains Tax?
Inflation Adjustment Applied to Estate Tax Exclusion
You can transfer unlimited assets to your spouse tax-free, but anything that you want to transfer to others is potentially subject to the death tax. The federal estate tax exclusion is the amount that you can transfer tax-free. The exclusion has changed a great deal over the years. Back in 2009, the federal estate tax exclusion was $3.5 million, and the maximum rate was 45 percent. Due to a provision contained within the Bush era tax cuts, the estate tax was repealed for the 2010 … [Read more...] about Inflation Adjustment Applied to Estate Tax Exclusion
Does a Revocable Living Trust Reduce Income Tax Responsibility?
Revocable living trusts are very useful on a number of different levels. However, there is no estate planning device that is an absolute cure-all. With this in mind, let's look at these trusts in detail. Probate Avoidance The biggest benefit that you derive when you create a revocable living trust is the avoidance of the probate process. You probably want your heirs to receive their inheritances in a timely manner. If you use a last will to transfer your personally … [Read more...] about Does a Revocable Living Trust Reduce Income Tax Responsibility?
Are Estate Tax Laws Subject to Change?
People who have enjoyed a great deal of financial success are often faced with estate planning challenges. You may naturally assume that you can leave assets to your loved ones free of taxation. After all, you paid many different taxes throughout your life. However, whether it is fair or not, there are taxes on large asset transfers in the United States. Transfer Taxes We have a federal estate tax, and it carries a maximum rate of 40 percent at the present time. The estate … [Read more...] about Are Estate Tax Laws Subject to Change?
What Is a Charitable Remainder Trust?
When you are planning your estate, you may want to consider your broader legacy. Giving back can be a very powerful thing, especially when you are thinking about how you will be remembered after you pass away. Acts of charitable giving can be rewarding on a personal level, and you can sometimes gain tax benefits when you give to charitable causes. There are various different ways that you can give to organizations and causes that are meaningful to you. Some people create private … [Read more...] about What Is a Charitable Remainder Trust?
