At one time, life insurance played a much more significant part in an estate plan than it does now. Why? Families would often use life insurance payouts to pay estate taxes. But with the federal gift and estate tax exemption at $13.61 million for 2024, far fewer families currently are affected by the estate tax.
What Is the Net Investment Income Tax?
What Is the Net Investment Income Tax?
While the Net Investment Income Tax (NIIT) most often affects wealthier individuals, in certain circumstances, it can also affect moderate-income taxpayers whose income increases significantly in a given tax year.
Use These Strategies To Pass on Wealth to Heirs
Individuals with significant assets should take advantage of proven tax strategies such as gifting and direct payments to educational institutions to transfer wealth to heirs tax-free, as well as minimize estate taxes. Additional opportunities are available as well, thanks to low-interest rates and a volatile stock market. Let’s take a look at some of them:
IRS Charges Fee for Estate Closing Letters
Starting October 28, a new $67 user fee will apply to any estate that requests an estate tax closing letter for its federal estate tax return. This closing letter is formally referred to as IRS Letter 627.
Estates and Trusts: Guidance for Itemizing Deductions
The Tax Cuts and Jobs Act (TCJA) prohibits individual taxpayers from claiming miscellaneous itemized deductions for any taxable year beginning after December 31, 2017, and before January 1, 2026. However, proposed guidance has recently been issued clarifying that certain deductions of estates and non-grantor trusts are not miscellaneous itemized deductions and are allowable in figuring adjusted gross income, specifically: