The IRS has released some tax tips for anyone who hasn’t yet filed a 2017 tax return. The due date was extended to April 18th after technical snafus at the IRS in accepting e-filings. • If a refund is due, there will be no penalty for the late filing. • The IRS Free File online […]
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Taxes and Living Trusts
Dear Trust Officer: How much can I save on my income taxes if I put my investments into a living trust? — Looking for Loopholes Dear Looking for Loopholes: Nothing. A revocable living trust that a grantor sets up to manage his or her wealth provides no income tax advantages. The trust’s income and capital […]
Read MorePerils of Deferring Estate Taxes
When a decedent’s estate includes interests in a closely held business, and it is large enough to incur federal estate taxes, the executor has the option of deferring the tax and paying it off in installments. In theory, this avoids having to sell the business to pay the tax. Selling a closely held business for […]
Read MorePaycheck Checkup
In January the Internal Revenue Service (IRS) released new withholding tables, based upon the changes for 2018 from the Tax Cuts and Jobs Act (TCJA). On February 28th the IRS released an online tool for calculating proper withholding after TCJA. The tool may be found at https://www.irs.gov/individuals/irs-withholding-calculator. The IRS called using this tool a “paycheck […]
Read MoreThe Trouble With “Portability”
Frank died in 2012. His estate elected the deceased spousal unused estate tax exclusion (DSUE), in an amount of $1.2 million—or the “portable” estate tax exemption, as it is more commonly referred to by non-lawyers. An estate tax return was filed showing no estate tax due, and the IRS sent a closing letter to the […]
Read MoreRetirement planning after tax reform
Several tax reform ideas affecting retirement planning were bandied about as the recent legislation was being prepared, including limits on deductible 401(k) contributions, elimination of “stretch IRAs,” and requiring minimum distributions from Roth IRAs, similar to the treatment of traditional IRAs. In the end, only one significant change made it into the final legislation, together […]
Read MoreTax reform and estate planning
The tax reform legislation signed by President Trump on December 22 last year included an important change for many wealthier families. As of January 1, 2018, the amount exempt from the federal estate and gift tax has doubled, to $10 million plus inflation adjustments since 2011 (so $11.2 million in 2018, still higher in the […]
Read MoreBitcoin and Taxes
Bitcoin, the popular digital currency, went on a tear in 2017, rising in value by 900% in the first 11 months. More and more investors are taking notice. On November 30, 2017 The Wall Street Journal ran a front-page article, “Bitcoin Mania: Even Grandma Is In.” On the advice of her grandson, Rita Scott invested […]
Read MoreFederal Estate Taxes
Dear Trust Officer: What is going to happen with federal estate taxes in 2018? —Interested Observer Dear Interested Observer: The IRS has announced that, under current law, the inflation-adjusted exemption from federal estate and gift tax will grow to $5.6 million in 2018. For a married couple, that means a total estate of $11.2 million […]
Read MoreThe Framework for Tax Reform
On September 27 President Trump released a nine-page “framework” for new tax legislation. The framework adds some detail to the one-page outlines that had been released earlier by the administration. The new target for the corporate tax is 20% instead of 15%. The “border-adjustable tax” is history. Pass-through entities (used by most small business owners) […]
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