The tax on a departed individual's property is heavily taxed by the U.S. government if it exceeds a certain limit. The rate of taxation for the amount above the exemption limit is a flat 45 percent. This means that every dollar over the limit will have to pay 45 cents to estate taxes.
It is possible to get tax relief on estate taxes. One simple way is to transfer the estate by way of gift. It is a common rule that all gifts, except for some, are eligible for tax relief.
Some examples are:
- If you are making a gift to your spouse
- Any gift given to political organizations for their own use
- Most gifts made to a recognized charity.
- Gifts given to an individual are not taxable if under $12000 a year. This tax relief benefit comes under Annual Exclusion.
You will be pleased to know that the limit for lifetime exclusion is $1 million. So you can make a number of $12000 gifts to different persons and get tax relief. If you decrease the size of your property in your lifetime by giving gifts, you can surely get away from the estate tax.
It is legal to give any amount of gift to your spouse with no tax liability. This is a great way to decrease your estate tax liability, and it is even possible to get full tax relief if you can cut the size of your assets to that level. But this amount will become taxable in the case of your spouse's death if the property is bigger than what is allowed.
Do you also want to learn about getting rid of your IRS and/or state tax problems? Visit us at our website for money saving Tax Debt Tips and Strategies. http://www.LimonWhitaker.com
Over the past few years N. F. Centeno and partners have helped thousands of people with their IRS and state tax problems. We'll Handle The IRS For You
Article Source: http://EzineArticles.com/?expert=Noreen_Centeno
Comments