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How is estate tax determined?
what is an estate tax
Does the Unified gift and estate tax credit reduce the size of the gross estate?
No. calculate the taxable estate of the deceased. Determine the estate tax the taxable estate. Add the gift taxes on lifetime gifts after 1976. This is the GROSS ESTATE TAX. Deduct the unified credit from the gross estate tax - this is the estate tax. If its, zero or less - there is no estate tax.
Is the inheritance tax going to change in 2010?
I assume you mean the estate tax, not the inheritance tax. (There is a federal estate tax, but no federal inheritance tax.) The federal estate tax will be abolished in 2010. And (unless the law is changed) it will be reinstated in 2011 and the exclusion amount will drop from the $3.5 million in 2009 to $1 million in 2011. Note that this does not apply to state estate or inheritance taxes. Because of the craziness on the federal level, many states have been revising their estate taxes to decouple them from federal changes. ***Caution*** Before making any plans to die in 2010 in order to take advantage of the estate tax repeal, be aware that this situation is very fluid and the law could be changed.
Can an executor be held personally liable for the estate tax?
can the executor be liable for estate tax
Is there tax on tax inheritance?
I guess it depends on the situation; An inheritance tax (also known as an estate tax) is a tax levied on a person who inherits money or property, or a tax on the estate (total value of the money and property), of a person who has died; as long as the FMV of the estate or the amount of inheritance exceeds a certain level, you are subject to inheritance tax. == ans == While the entire concept of inheritance/estate tax is complex, with many exemptions and exclusions and other considerations - the above is wrong. The Federal laws are changing, but basically, if the estate (as it is defined) is )or soon will be) under 5M there is no tax on it. That is - a tax on the ESTATE of what the deceased has to give. What one receives from an estate (with certain exemptions, like to a spouse, generally) - an INHERITANCE - is generally taxable as income to the one receiving it. Also if the money is coming from the deceased IRA (or certain other qualified retirement savings plans), there may be options on how to have it paid that either defer or change the amount of tax to be paid. Finally, the laws in the STATES are generally entirely different. (So an estate may not be taxed by the Feds, but taxed by the State, and an inheritance taxed by the Feds and not the State).
What is 529 location?
529 plans are tax-advantaged savings plans designed to encourage saving for future education costs. The number "529" refers to the section of the Internal Revenue Code that governs these plans. Each state offers its own 529 plan, which can be used to save for a beneficiary's qualified education expenses.
How is IL 529 related to education?
The IL 529 is a prepaid tuition program offered by the state of Illinois. There are several different plans to choose from and the Illinois 529 is also an excellent way to get a tax write off or credit.
How does a 529 savings plan work?
A 529 plan lets you set aside money for your child's education either with a financial institution or a specific school. These plans have significant tax benefits.
What is a 529 plan and how does it work?
It is a tax-advantaged college savings plan.529 plan historyA 529 Plan is an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs. It is named after Section 529 of the Internal Revenue Code which created these types of savings plans in 1998.State plans are OK for out of state colleges529 Plans can be used to meet costs of qualified colleges nationwide. In most plans, your choice of school is not affected by the state your 529 savings plan is from. You can be a CA resident, invest in a VT plan and send your student to college in NC. Check to see if your institution is eligible under 529 rules.Which states offer 529 plans?Every state now has at least one 529 plan available. It's up to each state to decide whether it will offer a 529 plan (possibly more than one) and what it will look like, meaning 529 plans can differ from state to state. You should research the features and benefits of your plan before you invest, research state 529 plans and even compare between plans compare between plans.Tax BenefitsAs long as the plan satisfies a few basic requirements, the federal tax law provides special tax benefits to you, the plan participant.Some states (but not all) offer tax incentives to investors as well. Research your state's tax treatment.Types of 529 plans529 plans are usually categorized as either prepaid or savings plans.Savings Plans work much like a 401K or IRA by investing your contributions in mutual funds or similar investments. The plan will offer you several investment options from which to choose. Your account will go up or down in value based on the performance of the particular option you select.Prepaid Plans let you pre-pay all or part of the costs of an in-state public college education. They may also be converted for use at private and out-of-state colleges. The Independent 529 Plan is a separate prepaid plan for private colleges.Educational institutions can offer a 529 prepaid plan but not a 529 savings plan (the private-college Independent 529 Plan is the only institution-sponsored 529 plan thus far).Enrolling in a 529 planThere are two ways to invest in a 529 plan.Directly with the 529 Plan manager.Through a financial advisor.
Can 529 plan be use in the Philippines?
529 plans are tax-advantaged savings plans designed to help families save for future education expenses in the United States. They cannot be used to fund education expenses in the Philippines or any other country outside of the US.
Are contributions to a 529 savings plan tax deductible?
This depends on which state plan you have signed up for. You can open a plan in a different state to take advantage of a greater selection of mutual funds, however contribution to out of state plans are not tax deductible. Contributions to a 529 plan may be tax deductible at a state level. Rules vary depending on the state.
An Overview of 529 Plans?
College costs are increasing each year, and parents who haven't saved to send their kids to college usually have to scramble for the money. Fortunately, there is a way to accumulate money for a college education that offers tax advantages and flexibility. A 529 plan allows parents or anyone else to save and invest money for a designated beneficiary's education. The federal government authorizes 529 plans, but individual states administer them, so they may vary from state to state. There are two types of 529 plans to choose from. The first is the prepaid tuition option plan. Investors simply buy college credits at today's prices for future use. The second type of 529 plan is the savings plan, which allows investors to save money and invest it among a selection set investment options. No tax deductions are allowed for contributions to 529 plans, but distributions of the investments gains are tax free for the beneficiary if used for designated college expenses. Some states also allow contributions to be deducted from taxable income as well as allowing tax-free distributions.Advantages of 529 PlansBesides their tax advantages, 529 plans allow owners to transfer the plan to another beneficiary if the original beneficiary is awarded a scholarship or decides not to go to college. The owner may also keep the money, although taxes and penalties may possibly be accessed in such a case. Anyone can be the owner of the plan and others, such as relatives and friends of the beneficiary, can contribute to the plan. The owner of the plan retains control of the funds, so the beneficiary cannot spend the money on things other than college expenses.Disadvantages of 529 PlansDistributions from 529 plan can reduce eligibility for financial aid. Investment choices are limited and can only be changed once a year. There is also no guarantee that 529 savings plans will experience market gains. They may, in fact, lose money.
How is estate tax determined?
what is an estate tax
What are the most secure college savings plans?
You should try a 529 college savings plan. A 529 plan is a tax-advantaged way for family of any income level to save for college. It remains the top and most effective way to save for your or your children's college.
If You Have Children You Need A 529 Savings Plan?
The cost of college tuition and related expenses is always on the rise. One of the best ways to offset this expense is to invest into a 529 savings plan. A 529 plan is an investment account that can be used only for college tuition and related expenses such as books, boarding and lab fees. There are two distinct plans under the 529 tax code. The Prepaid College Fund is a 529 plan that allows you to purchase credits for college at the rates of tuition today. This is very economical, especially if you have small children. The other 529 plan is a savings plan. This plan is one that allows you to invest money to be later used for college. States generally regulate the 529 plan even though the guidelines for the plans are set forth by the Internal Revenue Service. Most plans offer incentives if the money is later used to attend college in the same state. 529 plans are very “hands on” types of plans and you will be able to manage the account. You are not taxed on 529 earnings until you make a withdrawal to pay for college. Once you have made a withdrawal you will receive a 1099 at the end of the year for additional income. Money that is withdrawn from a 529 savings plan that is not used for college expenses is subject to income tax and a 10% penalty by the IRS. States that offer tax credits for having a 529 plan may also reclaim those credits if the plan is not used for college. One downfall to a 529 plan is that it will be used as a source of income when applying for student loans/aid. Because of this you may not qualify for all the student programs out there. This should not be a deterrent however, 529 plans make an excellent tool for paying for higher education. The amount of money you will need to invest in a 529 plan will depend on the type of plan you select and the age of your children. Some states, such as Florida, only allow enrollment into a 529 plan once a year. If you are interested in this type of college savings plan you should familiarize yourself with your particular states regulations.
What is IL 529 concerning education?
Il 529 is Illinois' version of a 529 plan, which is a tax advantaged investment vehicle which helps Americans save for higher education. The plan is an education savings plan operated by a state or educational organization. For more information on the plans Illinois offers, check out https://www.brightstartsavings.com/OFI529/ - good luck!
Does the Unified gift and estate tax credit reduce the size of the gross estate?
No. calculate the taxable estate of the deceased. Determine the estate tax the taxable estate. Add the gift taxes on lifetime gifts after 1976. This is the GROSS ESTATE TAX. Deduct the unified credit from the gross estate tax - this is the estate tax. If its, zero or less - there is no estate tax.
