How do I save on estate and gift taxes?
When you mediate at Peace Talks, we can help you create an estate plan that minimizes estate and gift taxes. There are several exceptions and exemptions that we will help you choose in order to minimize these taxes.
- Exemptions of the Federal Estate Tax
- The Personal Exemption: If your estate is worth more than the amount of the personal estate tax exemption for the year of your death, your estate will owe taxes unless other exemptions or deductions apply.
| Year | Estate Tax Exemption | Highest estate and gift tax rate |
| 2004 | $1.5 million | 48% |
| 2005 | $1.5 million | 47% |
| 2006 | $2 million | 46% |
| 2007 | $2 million | 45% |
| 2008 | $2 million | 45% |
| 2009 | $3.5 million | 45% |
| 2010 | Estate Tax Repealed | Top individual income tax rate (gift tax only) |
| 2011 | $1 million unless Congress extends repeal | 55% unless Congress extends appeal |
- The Marital Deduction: All property left by a deceased spouse to a surviving spouse is exempt from tax.
- The
Charitable Deduction:
All gifts left to a tax-exempt charitable organization are exempt from
federal tax.
Give Away Property While You Are Alive: Federal law allows you to give property worth $11,000 or less per person (or noncharitable institution) per year. A couple can give $22,000 a year tax free to one person.
Create an Estate Tax-Saving Trust:
You can use a number of different types of trusts
to save on overall estate taxes, depending on your circumstances and
desires.
The Annual Exemption: Federal law allows you to give property worth $11,000 or less per person (or noncharitable institution) per year. A couple can give $22,000 a year tax free to one person. Click Here for Current Gift Tax Exemption.
The Marital Exemption: Gifts between spouses are exempt from gift tax. However, the marital deduction does not apply to gifts from a citizen spouse to a non-citizen spouse.
Gifts for Medical Bills or School Tuition: The payment of another person's medical bills or school tuition is gift tax exempt. However, if you give the money to the person directly to pay the medical bill or school tuition, and then the person subsequently pays the bill, the gift is not exempt. Payment of the bill must be made directly by you.
Federal Gift Tax: You can give away a total of $1million during your lifetime without paying gift taxes. The federal government imposes a tax on substantial gifts made during life. This tax is imposed on the giver of the gift, and not the recipient.
Peace Talks. 8055 W. Manchester Ave. # 201 Playa del Rey, CA 90293
phone (310) 301-2100 fax (310) 301-2102 e-mail: mediator@peace-talks.com |
