Inheritance Tax Preparation
Planning for inheritance tax is an essential part of estate planning for many Americans. Not all states impose inheritance tax on top of the estate tax that is owed once a person dies. However, tax law tends to be subject to change, and the specifics of who owes inheritance tax can differ from year to year.
If you’re unsure of the details of what your inheritance tax planning should look like, whether you’re planning a legacy for beneficiaries or you’re planning to receive an inheritance from a loved one, the inheritance tax planning experts at MJM Tax Consulting, LLC can provide you with the knowledge and expertise you need.
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Expert Inheritance Tax Planning Advice
If you are planning for the ways that your hard work and dedication can continue to benefit your loved ones after your death, we are happy to help with inheritance tax planning advice. A thorough plan for how your wealth will be inherited, including a plan and budget for applicable taxes, is a wise and necessary step in ensuring your wealth goes where it needs to.
If you have recently suffered the death of a loved one, and need inheritance tax planning advice or other information about how to protect your inheritance, we’re also here to help. We can offer specialized inheritance tax planning advice to grantors and beneficiaries.
How Is Inheritance Tax Different From Estate Tax?
Estate taxes are taken off of the assets of a person after they die. When a person passes away, their total assets are calculated. If the value of those assets are greater than the exception amount, then a certain amount is taken off in taxes. The exception amount may be subject to change, but as of 2018 it was $5.43 million.
While estate taxes are taken off of the estate holder’s total assets, inheritance tax is taken off of any money or property received by a beneficiary. The main difference is who is required to pay the taxes: the estate holder has to pay estate tax, but the beneficiary has to pay inheritance tax.
Who Has to Pay Inheritance Tax?
There is a certain amount of asset value that can be passed down to beneficiaries tax-free. This amount is subject to change every year, but in 2018 it was $1 million. On average, the amount of tax-free inheritance a beneficiary can receive is around that much every year. You are only required to pay inheritance tax if you are receiving an inheritance of more than the tax-free amount. For this reason, very few Americans who inherit money every year have to pay inheritance tax—usually only about 2%.
There are also some exceptions as to who has to pay inheritance tax. For example, most spouses can inherit more than $1 million in assets without having any inheritance tax planning.
Contact Us Now to Learn More About How to Avoid Inheritance Tax and for More Tax Planning Advice
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