Tax reform is hard to predict and also hard to pass.
Changing laws and tax codes does not happen overnight.
Many hours of drafting, discussing, redrafting, horse-trading, and voting go into the process.
A wise sage once quipped: there are two things you should never watch while being made ... sausage and tax law!
According to a recent CNN Money article titled “Will Republicans kill the estate tax?,” the end result of the latest tax reform could result in the repeal of the federal estate tax.
The death tax may actually die.
Currently, only 0.2 percent of Americans would be subject to the estate tax.
Only estates with more than $5.49 million for a single individual or $10.98 million for a married couple will need to file an estate tax return.
By the way, due to inflation adjustment, those numbers will be $5.6 million and $11.2 million, respectively, in 2018.
In 2017, about 11,000 estate would need to file this return.
Of these 11,000 only half would have to pay a tax.
Unless these numbers include you and your estate, then you will not be paying the federal estate tax.
What if you have a family business?
According to estimates, between 80 and 159 family farms or business would need to pay an estate tax this year.
These represent fewer than 3 percent of taxable estates.
If such a tax is a concern, there are some tax law tools and options to use to decrease the amount owed.
How much will the government stand to rake in if the tax is not repealed?
The tax had been projected to bring in between $25 billion and $34 billion over the next decade.
If the estate tax would affect you and the tax is not repealed, you should work with an experienced estate planning attorney to maximize your savings and your legacy impact.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: CNN Money (August 23, 2017) “Will Republicans kill the estate tax?”