FLORIDA ESTATE PLANNING AND PROBATE LAW BLOG: ESTATE TAX ELIMINATION

Showing posts with label ESTATE TAX ELIMINATION. Show all posts

DISTRICT OF COLUMBIA INCREASES ITS ESTATE TAX EXEMPTION

♠ Posted by Marc J. Soss in 2017 Federal Estate Tax,2017 federal estate tax exemption,DC estate tax,ESTATE TAX ELIMINATION,estate tax reform,florida estate planning

Tax reform dating back to 2014 has resulted in an increase in the District of Columbia's 2017 estate tax exemption amount to $2 million. In 2018 the exemption amount is anticipated to be equal to the 2017 federal exemption amount of $5.49 million. Currently, eighteen (18) states and the District of Columbia impose an estate or inheritance tax—separate from the federal estate tax. However, neighboring states have been repeal their estate and inheritance tax by raising the exemption amount to the federal level. For example, Maryland increased its 2018 exemption to $4 million in 2018, and the federal exemption amount in 2019. The Commonwealth of Virginia does not impose an estate tax on decedent estates.

PRESIDENT TRUMPS 2017 INCOME TAX PLAN

♠ Posted by Marc J. Soss in 2017 Federal Income Tax plan,elder planning,Estate planning attorney,ESTATE TAX ELIMINATION,federal income tax return,florida estate plan,florida estate planning,income tax reduction,Trump Tax Plan

On Wednesday, April 27, 2017, President Trump outlined his plan for income tax reform. His plan includes the following: decreasing the top corporate tax rate from 35% to 15%; imposing a one-time tax on the repatriation of previously untaxed overseas profits at a to-be-determined rate; conversion from the current system of taxation on worldwide profits to a territorial-tax system in which foreign profits are not taxed; decreasing the number of income tax brackets from seven (7) to three (3); a top individual income tax rate of 35% (down from the current 39.6 percent); maintaining the long-term capital gains and dividends tax rate at a maximum rate of 20%; repeal of the Alternative Minimum Tax, Estate Tax, and 3.8% Medicare tax on Net Investment Income; elimination of itemized deductions (deduction for state and local taxes); and doubling of the standard deduction (from $12,000 to $24,000 for married couples filing jointly and from $6,000 to $12,000 for single filers). The 15% corporate rate would apply to profits of pass-through businesses (S Corporations and LLCs) whose profits currently flow through to individual taxpayers and are taxed at a current rate as high as 39.6%. Itemized tax deductions for charitable contributions, mortgage interest and retirement savings will remain in place.

STATE ESTATES AND INHERITANCE TAXES IN 2017

♠ Posted by Marc J. Soss in 2017 Federal Estate Tax,asset protection planning,estate planning,ESTATE TAX ELIMINATION,inheritance tax,retirement planning,Sarasota retirement planning,state death taxes,state estate tax exemption

For years it has been discussed that for estate tax purposes it was better to die a resident of certain states than others. The following is an updated list, as of January 1, 2017, of the states which impose a "death or inheritance tax" on its residents and those who follow the Federal Estate Tax Exemption amount. Good States in Which to Die a Resident: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Indiana, Louisiana, Michigan, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin, and Wyoming. Bad States in Which to Die a Resident: Connecticut ($2,000,000), Delaware ($5,490,000), District of Columbia ($2,000,000), Hawaii ($5,490,000), Illinois ($4,000,000), Iowa (inheritance tax on transfers to others than lineal ascendants and descendants), Kentucky (separate inheritance tax), Maine (estate tax and no portability), Maryland ($3,000,000), Massachusetts ($1,000,000), Minnesota ($1,800,000), Nebraska (County Inheritance Tax), New Jersey ($2,000,000), New York ($4,187,500 for April 1, 2016 through March 31, 2017 and then $5,250,000 for April 1, 2017 through December 31, 2018), Oregon ($1,000,000), Pennsylvania (Inheritance Tax), Rhode Island ($1,500,000), Vermont ($2,750,000), and Washington ($2,129,000).

WHAT TRUMP'S FEDERAL INCOME TAX PLAN MAY LOOK LIKE

♠ Posted by Marc J. Soss in 2017 federal estate tax exemption,ESTATE TAX ELIMINATION,Federal Estate Tax,federal income tax return,Federal tax law changes,florida estate planning,Trump Tax Plan

Most individuals expect significant changes to the US Tax Code once President (elect) Trump takes office. High on his agenda are the following: INDIVIDUALS: Cut the number of individual income tax brackets (from 6 to 3) and bring income tax rates down to 12%, 25% and 33% - that would benefit everyone who works across the board. Elimination of the 3.8% Obamacare tax - if Obama Care goes away this extra tax on the wealthy will go away with it. Tax carried interest gains as ordinary income. Retain 20% capital gains rate for non-corporations. Increase the standard deduction for joint filers to $30,000 from $12,600, while eliminating personal exemptions - basically a wash. $200,000 cap for itemized deductions for joint filers - this will only impact high earners. Most importantly, repeal of the estate tax (a double tax for those who leave an inheritance to their children, etc..). This would be offset by no step-up in basis at death, except on first $10 million of assets. CORPORATIONS | BUSINESS: Lower the business tax rate for corporations and small businesses alike to 15%, but with elimination of many deductions - we have one of the highest corporate tax rates in the world. Ever wonder why so many companies leave the US for foreign shores. Elimination of corporate alternative minimum tax - to bring american business back home. A 10% one-time tax on repatriation of corporate profits held offshore - could raise trillions of dollars. Allow U.S. manufacturers to elect to expense capital investment and lose the deductibility of corporate interest expense.

IMPORTANT 2017 FEDERAL TAX AND EXEMPTION AMOUNTS

♠ Posted by Marc J. Soss in 2017 federal estate tax exemption,2017 federal gift tax exemption,2017 retirement account,estate plan,Estate planning attorney,ESTATE TAX ELIMINATION,florida estate planning

Federal Estate & Gift Tax: The Federal estate tax exemption amount will be $5,490,000 in 2017. The annual gift exclusion amount will remain at $14,000 Qualified Plans for 2017: The limit on the maximum amount of elective contributions that a person may make to a §401(k) plan, a §403(b) tax-sheltered annuity, or a §457(b) eligible deferred compensation plan remains unchanged at $18,000. The limit on “catch-up contributions” to a §401(k) plan, a §403(b) tax-sheltered annuity, or a §457(b) eligible deferred compensation plan for persons age 50 and older remains unchanged at $6,000. The dollar limit on the maximum permissible allocation under a defined contribution plan is increased from $53,000 to $54,000. The maximum annual benefit under a defined benefit plan is increased from $210,000 to $215,000. The maximum amount of annual compensation that may be taken into account on behalf of any participant under a qualified plan will go from $265,000 to $270,000. The dollar amount used to identify “highly compensated employees” remains unchanged at $120,000. Social Security Tax: The Department of Health and Human Services has set the maximum taxable wages for the OASDI portion of the social security tax at $127,200 for 2017, which is an increase from the 2016 limit of $118,500.

NEW JERSEY ELIMINATES ITS ESTATE TAX IN 2018, BUT KEEPS ITS INHERITANCE TAX

♠ Posted by Marc J. Soss in elder planning,Estate planning attorney,ESTATE TAX ELIMINATION,florida estate planning,florida probate attorney,florida probate lawyer,New Jersey Estate Tax elimination,New Jersey Inheritance tax

On October 14, 2016, Governor Chris Christie signed into law legislation which raises the New Jersey estate tax exemption to $2,000,000 in 2017 (up from $675,000) and eliminates it entirely in 2018. Until January 1, 2018, the New Jersey estate tax will continue to be applied based on a graduated rate table which begins at 4% for estates of $675,000 or more and increases to 16% for estates in excess of $10,100,000. While the New Jersey estate tax exemption is going away, the New Jersey inheritance tax will remain. The New Jersey inheritance tax only applies to transfers to other relatives and friends, and does not apply to transfers at death to parents, spouse, children and other descendants and charity. So ends New Jersey's reign as the state with the highest estate tax among those states which continue to impose an estate tax.

NEW JERSEY DISCUSSES ELIMINATION OF ITS ESTATE TAX

♠ Posted by Marc J. Soss in ESTATE TAX ELIMINATION,new jersey,retirement

Recent reports indicate that the State of New Jersey will officially eliminate it's estate tax. The tax elimination will be offset by an increase in the both the gas and sales tax. The tax reform will also include a larger tax credit for the working poor, a tax cut on retirement income, and a tax exemption for veterans who have been honorably discharged. It is anticipated that the estate tax exemption will increase from $675,000 (its current exemption amount) to $2,000,000 effective January 1, 2017 and be phased out completely over the next few years.