As you know from the previous blog, a personal representative may also be responsible for filing a decedent’s final individual income tax return or Internal Revenue Service (IRS) Form 1040. You will also have to make sure you file an IRS Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. As the personal representative appointed to administer an estate, you must also file a federal income tax return on the estate’s behalf. The estate’s gross income includes everything … [Read more...] about Your Federal Income Tax Duties as a Personal Representative: Part 3 of 3
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Your Federal Income Tax Duties as a Personal Representative: Part 2 of 3
Continuing our discussion of a personal representative’s federal income tax responsibilities on behalf of the estate, we will discuss what these responsibilities entail. As a personal representative, you will have to make sure you file all tax documents and forms in a timely fashion and pay any tax liabilities. You may also be responsible for filing individual income tax returns or the decedent’s final income tax return. You will have to comply with the strict deadlines imposed by IRS or request … [Read more...] about Your Federal Income Tax Duties as a Personal Representative: Part 2 of 3
Your Federal Income Tax Duties as a Personal Representative: Part 1 of 3
According to the Internal Revenue Service (IRS), a personal representative of an estate includes an administrator or executor appointed by a probate court or appointed by will to administer the decedent’s estate and distribute the property and assets within his estate. The personal representative also has specific federal and state tax liabilities and is responsible for paying creditors before distributing most of the estate’s assets. This three-part blog series covers a personal … [Read more...] about Your Federal Income Tax Duties as a Personal Representative: Part 1 of 3
2012 Texas Franchise Tax Update
The Texas Comptroller’s Office issued a draft copy of its 2012 Texas franchise tax report. The report identifies several new items for 2012, including a $50 late filing penalty. Taxpayers are reminded that the $1 million no tax due threshold is extended to December 31, 2013. As a result of the Consumer Price Index adjustment, the no tax due threshold is now raised to $1,030,000, and the compensation deduction has also been raised to $330,000 per person, for reports due on or after January 1, … [Read more...] about 2012 Texas Franchise Tax Update
When is a Gift Taxable?
Not every gift has to be reported to the IRS, nor does every gift trigger a tax; but it’s important to understand when the IRS needs to know about a gift. Here’s a brief summary of the situations in which the federal gift tax applies: Who Receives the Gift, and How Much is it Worth? For gift tax purposes, the IRS looks at gifts to a spouse differently than it does gifts to a non-spouse. Assuming your husband or wife is a United States citizen, the unlimited marital deduction applies, and … [Read more...] about When is a Gift Taxable?
The Gift Tax Doesn’t Always Apply
There are many everyday situations in which we give gifts that aren’t subject to the federal gift tax. On the other hand, there are quite a few situations where gifts are reportable to the IRS, and they may be taxable. It’s important to know the difference. So, what types of gifts are not subject to the gift tax? Gifts to a U.S. Citizen Spouse If your husband or wife is a United States citizen, then you can give him or her an unlimited amount of property, tax-free, regardless of value. If … [Read more...] about The Gift Tax Doesn’t Always Apply
Three Smart Uses for Your Tax Refund
What do you plan to do with your tax refund this year? Here are three suggestions that could net you long-term benefits: Reduce Your Debt: If you have credit card bills or other consumer debt hanging over your head, consider putting your tax refund to work by using it to pay down those debts. Not only will this reduce your current monthly bills and free up some cash, getting out of debt and staying out of debt can put you in a better position when the time comes to retire. Pay Down Your … [Read more...] about Three Smart Uses for Your Tax Refund
How is an LLC Taxed?
A Limited Liability Company (LLC) is treated by the IRS as pass-through entity. Unlike a corporation, which must file its own, separate income tax return, the owners of an LLC (“members”) report the company’s profits or losses on their personal income tax returns. Here are the default rules: Single-Member LLC: An LLC that has only one member is treated by the IRS as if it were a sole proprietorship. So, there’s no separate LLC tax return, and the LLC as a business entity does not have to pay … [Read more...] about How is an LLC Taxed?
Sharing the Wealth With Mom and Dad
A lot of estate planning advice focuses on the steps you can take to protect and provide for your spouse and children, while minimizing your tax burden. But what about taking care of your mom and dad? Many adult children are in a better financial position than their elderly parents, and want to know what they can do to share the fruits of their labor. Here are just a few suggestions: Give Gifts: Under the current federal gift tax law, you can give up to $13,000 in money or property to an … [Read more...] about Sharing the Wealth With Mom and Dad
It’s Official: The Return of the Estate Tax
Congress has passed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 ,and on December 17, President Obama signed it into law. Among the many things the new law does is give us temporary certainty as to the status of the federal estate and gift taxes. Here’s a brief rundown: As for the estate tax, the maximum rate is 35%, and there’s a $5 million individual exemption. Any exemption that is unused by the estate of one deceased spouse may be used by the … [Read more...] about It’s Official: The Return of the Estate Tax
