Giving to charity over your lifetime can be powerful. Not only can you make an impact on the charities you care about, but you enjoy personal satisfaction and even charitable deductions. Still, since the tax laws are in a state of flux (and we can only expect them to become more uncertain as the politics in Washington continues to boil over), making substantial lifetime gifts may become more dicey, especially given the fragile economy. As a result, giving at your death may be more attractive and practical. As the Wall Street Journal points out, there is always the option of…
Are you a small business owner? Do you have any “independent contractors”? Really? Then, watch out! The IRS is looking for revenue. Surprised? Don’t be. If you use independent contractors, then you might need to exercise a bit more diligence. Why, the IRS may consider them to be “employees” masquerading in a tax-cheating disguise. It’s quite common for small business owners to rely on independent contractors, especially in lean times. And, from the perspective of the IRS, the difference can be huge in tax and legal terms. Why? An employer doesn’t have to withhold taxes or pay any benefits (instead,…
Often, American citizens aren’t the only ones subject to American taxes. So, it isn’t only American citizens who have something to gain from the recent tax law changes. We’ve all been given a generous tax windfall for 2011 and 2012 when it comes to gift and estate taxes, and, according to a recent article in Private Wealth, it may be an especially windfall for wealthy non-citizens. For a wealthy non-citizen residing in the U.S., the problem is their possible tax liabilities lie within a hazy zone between a “domiciled resident” and a “non-domiciled resident.” The initial guidelines for determining domicile…
Unfortunately, estate planning opportunities tend to be hard to time. Practically speaking, you tend to not be “done” with your estate when the law creates a planning window. Certainly, that was the joke in 2010 when the estate tax lapsed and it become “the year to die.” [Just ask the family of George Steinbrenner!] As I and many others have noted previously, both 2011 and 2012 are incredibly favorable years for gifting. While the law (and other factors) have made these scant two years such a great window, that doesn’t mean you’re done with those assets of your estate you…
If your last name is “Steinbrenner,” or you also are the heir to the estate of a decedent who passed in 2010, then you likely know that your assets stand at a crossroads and that the estate executor has a huge choice: to file for the estate tax or not to file? That, is the question. Formerly, the deadline was November 15, 2011, only a couple weeks out. Good news: Now, the deadline has been extended out to January 17, 2012. So, why is there even a choice to file an estate tax return anyway and why might it be…
One solution: Donating the principal to a nonprofit in the form of a "charitable gift annuity" in exchange for lifetime fixed annuity payments. Remember the good old days, you know, when you could invest in a certificate of deposit (CD) and the bank would actually pay you something called “interest” on your deposit? No, really, I kid you not. Obviously, I am being a bit factitious, but you get the point. It is hard enough to make money these days, let alone accumulate wealth. Let’s say you are retired and are looking for a place to put your money to…
On August 5, 2011, the IRS published long-awaited guidance for executors of estates of people who died in 2010. Notice 2011-66 explains how these executors can opt out of the estate tax, and Revenue Procedure 2011-41 explains the special tax rules that apply to assets when executors opt out of the estate tax. After a bit of biding our time, we finally have something official with which to work regarding 2010 estate taxes. Nevertheless, there is a bit more waiting to do. The IRS recently published its guidance in the form of Notice 2011-66 and Revenue Procedure 2011-41. As you…
Wealthy individuals in the U.S. will find it easier to cut their estate-tax bill as a result of a provision for using their deceased spouses’ exemption credit.
With the new estate tax laws in place, including the $5 million exemption ($10 million for a married couple), many people are enjoying a false sense of security about any potential estate tax liability. First, as Forbes recently pointed out, keep in mind this new generous law expires at the end of 2012 … and it’s anyone’s guess what will happen next. In the meantime, also remember that if your state imposes a state estate or inheritance tax, the likely outcome is that combined federal and state taxes could pack a surprising punch for those above the $5 million exemption…
Frederick, MD 
301-663-9230
