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Inheritance Tax Law – What Will You Pay?
from:If you’ve recently inherited money from a deceased relative, you may be confused about inheritance tax law and how it will affect your taxes this year. Inheritance tax law is somewhat complicated, particularly because of the “phase out” period that these taxes are going through right now. But, here are some basics to get you started if you’re trying to determine if you’ll owe inheritance tax this year.
• You don’t pay inheritance tax if you’re the spouse of the deceased – If your husband or wife dies, according to inheritance tax law, you’re generally not subject to inheritance taxes on the money you receive as part of your spouse’s estate.
• You don’t pay inheritance tax on life insurance – Generally, life insurance proceeds you receive are not subject to inheritance tax and are also not considered reportable income. However, any interest you receive on a life insurance policy is income that you must report.
• You don’t pay inheritance tax on estates worth less than $2,000,000. – This inheritance tax law is currently subject to the Economic Growth and Tax Reconciliation Act of 2001. So, if a relative dies in 2006, 2007 or 2008, you are not subject to inheritance tax if their taxable estate is worth less than $2,000,000. In 2009, this amount will increase to $3,500,000 and in 2010, the estate tax will be repealed altogether. However, unless Congress acts, beginning in 2011, the estate tax will return, and you will be exempt from inheritance tax only up to $1,000,000.
• You Can’t Avoid Inheritance Tax by Acquiring the Money Just Before a Person Dies – If your relative turns over their fortune to you just before their death, what you receive may still fall under the inheritance tax law requirements, under the gift tax law. Each year, a person can give away up to $12,000 per person without any gift tax being incurred. A couple can give away double this amount. However, there is a lifetime limit to one person of $1,000,000 before inheritance tax law kicks in. There are many other caveats to how the gift tax works, so it’s wise to consult your tax advisor before making or receiving cash gifts.
If you’ve received an inheritance this year, get with your tax advisor sooner rather than later to determine the exact tax implications for you. In general, if the adjusted estate is worth less than $2,000,000, you are not subject to inheritance tax law says you don’t have to pay. However, it’s always wise to have an expert look at your particular situation before it’s time to file those year end taxes.
Tobacco Tax Law Specific Links
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Tobacco Tax Law News
Area legislators have own ideas about proposed state tobacco tax - Hattiesburg American
Area legislators have own ideas about proposed state tobacco tax Hattiesburg American, MS - Haley Barbour's proposed tobacco tax hike in his 2009 budget plan doesn't go far enough. Barbour has proposed adding 24 cents a pack on name brands and 43 ... Gov.: Tough times call for tight budget 2 businessmen: Let's vote Barbour calls for prudent budget |
Legislature needs to act on efforts to cut smoking - South Carolina Now
 WJBF-TV | Legislature needs to act on efforts to cut smoking South Carolina Now, South Carolina - We hope that next year the legislature will again pass the increase in the cigarette tax and have enough votes to override a veto from Sanford. ... Activists say tobacco settlement is being wasted Hughes: Georgia's smoke screen  Comment by M. Cass Wheeler CEO, American Heart Association |
Is a cigarette tax increase gaining traction? - Lawrence Journal World
Is a cigarette tax increase gaining traction? Lawrence Journal World, KS - TOPEKA — As the prospect of deep budget cuts increases, does a tax increase become more appealing? Comments by House Speaker Melvin Neufeld, R-Ingalls, ... |
Cigarette Tax Proposal - Capitol News Service
Cigarette Tax Proposal Capitol News Service, Florida - The tax hasn’t been raised in more than a decade. State Representative Jim Waldman is sponsoring a one dollar per pack cigarette tax increase and says the ... |
Kentucky urged to raise cigarette tax - Louisville Courier-Journal
Kentucky urged to raise cigarette tax Louisville Courier-Journal, KY - Julie Denton, R-Louisville, who lead the panel and have said they favor a cigarette-tax increase. Monroe, a Kentucky native whose grandfather raised tobacco ... Ky. lawmakers learn about Indiana's cig tax hike Kentucky way behind Indiana in efforts to get residents to quit ... 'Free to disagree' |