The tax rules, credits, and exclusions that are applicable to gift and to estates are continuously changing. As a result, one needs to be conscious of these changes so that effective tax reduction plans can be applied to a given event or situation. Although there are many estate planning concepts and provisions from a taxation perspective these concepts are two expansive and often to specialized to be covered all at once or to be relevance to a wide audience. Having said this, it is important to note that there are some foundational concepts that taxpayers and estate planners should be aware of as well as their most up-to-date application. Some of these concepts along with figures relevant to the 2015 tax year are listed below.
1. Federal Unified Credit Exemption: The Unified Federal Credit exemption allows for non-taxable transfers, through gifts during one’s lifetime or through estates upon ones death, up to a specified dollar value (Daily & Quinn, 2014). This value often increases, similar to the level of inflation, so that the exemption does not become diluted. In 2015 the Unified Federal Credit exemption was increased from $5.34 million to $5.43 million dollars (Jacobs, 2014).
2. NYS Unifies Exemption Amount: comparable to the federal credit exemption, the state exemption accomplishes the same purposes. Each state has difference estate tax rates and rule. For NYS the exclusion amount for the 2015 tax year is $3,125,000.00 with an annual increase of roughly 1,000,000
There are a few significant tax considerations of which you should be aware if you decide to take Tout Suite, Inc. global. It is important to first decide how you will structure the foreign entity. You have a few options available to you, and the details of each alternative are described below. We have also included information on tax consequences of your move to Belgium. It is important to note that the United States currently has an income tax treaty with Belgium which may impact both Tout Suite’s
INTRODUCTION
In this memorandum, we explain the purpose and reasoning to justify the tax system applied to each household in our country. In order to reach our goal of $55,300 for expenses, we implemented a tax system that is progressive, fair, and structured. We will also compare our tax system to the U.S. tax system and highlight the benefits.
GROSS INCOME
Before deciding on any type of tax rate, we determined the amount that is considered income for each taxpayer (Exhibit B). First, we looked
the last changes to the tax law through President Obama’s term, Congress agrees on making many of the “Tax Extenders” permanent. These so-called “Tax Extenders” are tax provisions that Congress has passed over the past few years with short-term expiration dates, at which point the provision would lapse. Typically, after the provision lapsed, Congress would retroactively reinstate the provisions, thus extending its life through the current tax year. This has led to some tax planners relying on the
married filing separately a spouse would only be able to earn $8,925.00 of taxable income before they would be progressed to the next tier of the income tax bracket. Under married filing jointly the spouses could earn $17,850.00 of taxable income before they would be progressed to the next tax bracket. These figures were based on the IRS income tax guidelines for the year 2013. (Phillips Erb). They will qualify for 2
Defense of Marriage Act Ruled Unconstitutional:
How the Supreme Court’s Ruling on DOMA Will Affect Same-Sex Taxpayers
Melissa Williams
Troy University
November 20, 2014
Author’s Note
This paper was prepared for Federal Tax Research 6684T, taught by Dr. Kaye Sheridan.
Abstract
On June 26, 2013, The United States Supreme Court struck down Section 3 of the Defense of Marriage Act (DOMA), enabling same-sex couples legally married under state law to be recognized for the purpose and benefit of
Prentice Hall's Federal Taxation 2014 Corporations, 27e
Chapter C12 The Gift Tax
1) The gift tax is a wealth transfer tax that applies to transfers during a person's lifetime and transfers at death.
Answer: FALSE
Page Ref.: C:12-2
Objective: 1
2) The annual exclusion permits donors to make gifts of $14,000 each to multiple donees.
Answer: TRUE
Page Ref.: C:12-4
Objective: 1
3) Molly sells her car, valued at $30,000, to her nephew Todd for $18,000. Molly has made a taxable gift.
Answer:
The United States has income tax treaties with a number of foreign countries. Under these treaties, residents (not necessarily citizens) of foreign countries are taxed at a reduced rate, or are exempt from U.S. income taxes on certain items of income they receive from sources within the United States (IRS, 2015). These reduced rates and exemptions vary among countries and specific items of income. The US has bilateral income tax treaties with many global trading partners. Under the terms of those
A. The couple’s filing status should be Married Filing Jointly.
A1. Married Filing Jointly would be the most beneficial for this couple because it will allow them to stay at a lower tax bracket and also qualify to take a higher standard deduction and higher deduction on the sale of their home than they would as individuals.
The family can claim 5 exemptions:
1. Spouse A can take a personal exemption
2. Spouse B can take a personal exemption
3. The 10 year old is classified as a qualifying
which in turn increases the property tax bill due to increased assessed values. It resembles a domino effect. Many elderly people are trying hard to stand firm on their feet to avoid being knocked over, but controlling their environment is nearly impossible and seeing annual updated assessed property values with increased appreciation may only be described as a nightmare.
Proposition 2 ½ (MGL Chapter 580 of the Acts of 1980), also known as Property Tax Levy or levy, is a Massachusetts law passed
an essay in which you recommend the most advantageous tax filing status for Spouse A and Spouse B on their federal tax return.
The filing statuses available to the taxpayer couple are married filing jointly, and married filing separately. The best filing status for Spouse A and B is married; filing jointly. Both spouse A and B have separate income for the year and so could file separate returns but they would also have to file at a higher tax rate schedule because their income is not combined. They