In this podcast, Anu Joshi from our Family Wealth and Individual Tax Planning Group discusses the top 5 non-tax related reasons you need an estate plan, from dividing your wealth to protecting your well-being.
The IRS recently released a draft of the new Form 1040, which has had a dramatic makeover. The new form is a large postcard-size document (half the normal page size), which may be a nod to President Trump’s campaign promise to simplify the tax code to the point that an average American could fill out their form on a postcard. Forms 1040EZ and 1040A have been eliminated, so all taxpayers will be using this new Form 1040 beginning with the 2018 tax year. (more…)
Vacation homes are typically treasured by families and often pass down from generation to generation. But there may be more to transferring the family lake cottage or beach house than first meets the eye. If you plunge ahead without careful planning, it could disrupt harmony and lead to a “family feud.” In some cases, relationships may be severed forever. (more…)
The season of giving is almost upon us, but will generosity to friends and family trigger a gift tax return filing requirement? The main tax advantage of gifting during your lifetime is the removal of assets that would otherwise be included in your gross estate and be subject to federal estate tax upon your passing. But even if your estate is under the current estate tax filing threshold of $5.49 million per taxpayer for 2017 (or $5.6 million in 2018), you may still be required to report gifts you made during the tax year. The annual gift tax return, IRS Form 709, is due April 15th following the calendar year the reportable gifts were made.
A common misconception is that once you have a will and a living trust in place, nothing else needs to be done in order for your assets to be distributed at your death according to your wishes. The mere listing of an asset in the trust agreement does not make it a trust asset. Actually, assets have to be held in the name of the trustee, (i.e. the title of the asset has to be transferred to the trustee of the trust,) in order for the asset to be subject to the terms of the trust agreement. At the same time, certain types of assets pass by other means, irrespective of whether or not a will or trust is in place. You will want to understand these differences in order to appropriately title your assets to make sure they are transferred as you intend at death.
As promised during his campaign, on April 26, 2017, President Trump unveiled a new broad tax-cut plan. Besides slashing business and individual tax rates and eliminating the net investment income tax and the alternative minimum tax, the proposal also includes eliminating certain itemized deductions such as the state and local income tax deductions. However, deductions for mortgage interest and charitable giving are expected to stick around. (more…)
Estate tax repeal is on the wish list of both the Republican party and the new President and is an idea that is generally popular with voters. However, a repeal of the existing transfer tax system would likely impact taxpayers in ways they are not aware of. In 2015, only 4,918 estates paid estate taxes, but the beneficiaries of all estates benefited from the income tax savings of a higher tax basis for the assets they inherited. Historically the repeal of an estate tax has been accompanied by changes in income tax rules that could reach far more taxpayers than the estate tax itself. (more…)