The federal threshold for a taxable estate is $11.7 million. However, states impose their own taxes which will impact a lot more people. If you believe you are close to the federal or state estate tax threshold, you should invest some time and money into determining if estate taxes will affect your estate.
The step-up basis loophole says that when assets are inherited the heir receives the asset at market value. If they sell the asset they will only pay capital gains on any growth that took place after they took ownership.
Your income is not all taxed at the same rate. Instead, different levels of income are taxed at different rates. Your effective tax rate is not your tax bracket, but is probably best described as an "average" tax rate pertaining to the federal income taxes you pay.
Donor-advised funds are perfect for those who give regularly to charities but not enough to take advantage of itemizing their deductions. These funds allow you to group many year's worth of donations into one year to optimize your tax deductions.
While there are a few scenarios that allow you to skip filing a return, it's usually a good idea to file even if you don't have to. Filing allows you to receive a refund, if you over paid your taxes and makes you eligible for any assistance you may qualify for.
H&R Block and TurboTax are both leaders in the tax prep industry and for good reason. Both offer online filing and live tax assistance -- for about the same price. So which is better for you?
There are two types of dividends - ordinary and qualified. Ordinary dividends are taxed like income. Qualified dividends are taxed as long term capital gains. The rate you pay for long term capital gains depends on your income but will be between 0 and 20%.
For a W-2 employee, April 15th is the day your tax return (and any money you owe) is due to the IRS. However, if you have non-W-2 income you actually owe taxes quarterly but still only file a return once per year.
Reaching a live person at the IRS can be tough, but it can be done. If you are having trouble, try calling your local office. The wait times might be shorter and you can make an appointment to meet with an advocate. Also, calling after 5 pm on Friday may be your shortest wait time.
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The CARES Act became law on March 27, 2020, with several financial aid provisions for American households. Two signature pieces…
Ever wonder how the gift tax works? If you have a potentially large estate, see how much can you give someone before it triggers an IRS form. You can use gifts to reduce that future tax burden!
