Inheritance Taxes

How to Leverage Trusts (Pt. 3)

The American Taxpayer Relief Act (ATRA) lets you leave millions to heirs tax-free. Our first two articles examined ATRA and various trusts. Here are some of the remaining tools you can use to bequeath assets and avoid a big estate tax bite.

You still need powers of attorney. Essential tools for managing disability, these are inexpensive and simple to set up.

Estate Planning Tools (Pt. 2)

Our first of three articles looked at your estate planning considerations now that the American Taxpayer Relief Act (ATRA) is law and you can leave $5.34 million ($10.68 million for married couples) to heirs tax-free. Other kinds of trusts offer you various ways to leave money and save taxes.

New Estate Plan Issues (Pt. 1)

You can stop worrying about federal estate tax thanks to Congress passing the American Taxpayer Relief Act (ATRA) last year. Here’s what you still better think about, though, before bequeathing your estate.

Pay Tax on a Life Policy Payout?

One of the advantages of life insurance payouts is that they are that tax-free, right? Well, that’s often true, yet not always. It pays to know when the taxman can take a bite of your benefit.

Your tax liability for life insurance policy payouts varies widely based on your situation. Let’s look into the basic rules and a few specific cases.

Retirees: Tax-Friendly States

What states tax retirees the least? That’s something to ponder as you plan where to retire to. It’s not the predominant factor, but an important consideration.

Kiplinger’s put together an interactive map that shows tax friendliness for retirees. The magazine has links to states with no sales tax, or low sales taxes, no income tax and more.

Where Are Taxes Going?

The jockeying has begun in Washington among President Barack Obama, the Republican-controlled House and the Democratic-led Senate on taxes. How this plays out will affect us all. What should we look for?

Taxes Rising? What To Do

Your tax rates may increase drastically on Jan. 1, 2013, as the Bush tax cuts expire. You can take steps now to minimize the bigger tax bite.
This advice assumes that Congress does not act to extend the Bush cuts. The three areas that will affect Americans the most will be on income, investments and estates.
Ordinary Income Tax

Holding Down Taxes on Gifts

If you are thinking of making a substantial gift, you can save a lot of money in taxes if you act soon. The limits on what you can give tax-free may expire in January.
“It’s no secret the recipient isn’t the only one benefiting from a monetary gift,” notes Amy Jo Lauber, president of Lauber Financial Planning in Buffalo, N.Y. “True, you feel good doing something nice for someone else.” But, she adds, giving money may also reduce your gross taxable estate or transfer income-producing assets to a beneficiary in a lower tax bracket.

A Portable Estate Tax Break

Maybe you can’t take it with you, but under the Tax Relief Act of 2010, you can give it to your spouse. In this case, “it” isn’t your assets but rather the portion of your federal estate tax exemption that’s not needed to shield your property from estate tax. 
Under the old rules, any part of your exemption not used at your death was lost. Now, the exemption is “portable,” and that creates estate-planning opportunities – at least through 2012. Next year, this new tax break is scheduled to expire. 

A Home: Good Investment?

Despite record low mortgage rates, purchasers should be cautious about putting too much money into real estate. In my opinion, it’s not a great investment and seldom has been.
Owning your own home – or owning several homes – has long been the American dream.  Your home may be your castle, and even your biggest asset, but is it a good investment?  Although there are significant psychological benefits to home ownership, the hidden truth is that housing is rarely the best use of your money from a strict investment viewpoint.


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