| |
| |
|
Taxes Information |
|
|
|
Estate Taxes - It Pays to Plan Ahead
Estate taxes. It's not enough to simply know they exist, and to know strategies to minimize them. When it comes down to it, you need to plan how you and your family will eventually pay them. The Estate Tax Dilemma Estate taxes are generally due nine months after the date of death. And they are due in cash. In addition to estate taxes, there may be final expenses, probate costs, administrative fees, and a variety of other costs. How can you be sure the money will be there when it's needed? Estate Tax Options There are four main sources of funds to pay estate taxes. First, your current savings and investments. You or your survivors can use savings and investments to cover the costs of estate taxes, probate fees, and other expenses. This is often a sound alternative. However, sometimes savings and investments may not be sufficient. And if those savings were earmarked for other financial goals, you may need to rethink how you will achieve those goals. Another option would be to borrow the money. Unfortunately, with this option you not only have to pay the estate taxes, but you or your survivors will be forced to pay interest on the amount borrowed to pay estate taxes. Remember to consider how your family's credit standing will be affected by a death in the family. The third option involves liquidation. If estate taxes are larger than the cash available to pay them, you may have to sell valuable assets such as the family home, the family business, or other assets. Hopefully, they will sell for what they're worth. In many cases, however, they don't. The fourth option - one that is often a prudent way to pay estate taxes - is life insurance. What Can Life Insurance Provide? Life insurance can provide a timely death benefit, in cash, that can be used to pay estate taxes and other costs. And it will be paid directly to the beneficiary of the policy, without being subject to the time and expense of probate. Granted, life insurance does require premium payments. However, if appropriate to your situation, life insurance premiums can be looked at as a systematic way of funding future estate taxes. You get guaranteed liquidity and a death benefit that is generally free from federal income taxes. Indeed, the financial protection provided by life insurance can be invaluable to those who have the burden of paying estate taxes - your loved ones. The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance. Keep in mind, however, that there are special tax rules that apply and you should seek professional advice before implementing this strategy. Coping with estate taxes may be a difficult proposition for you or your survivors. When it comes to paying them, consider life insurance. It may be a strategy worth considering, and overlooking it could be costly. Neda Dabestani-Ryba is a licensed Realtor in Maryland. She is a member of the President's Circle of Top Real Estate Professionals. She can be reached at (800) 536-3806 or visit her website for more information: http://neda.dabestani.pcragent.com/ Prudential Carruthers REALTORS is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Equal Housing Opportunity.
MORE RESOURCES:
Taxes - Google News |
|
|
|
RELATED ARTICLES
What to Do If You Can't Pay Your Taxes The end of tax filing extensions is quickly approaching. What do you do if you can't pay the amounts you owe? You should still file your return by the due date and pay as much as you can. Rental Property Tax Deductions Own residential rental properties? This article discusses how income from those properties impacts your taxes.What Constitutes Revenue?Generally, rental income is defined as any revenue you receive from the occupancy or use of residential property. Rearrange Your Affairs For Maximum Tax Savings One way to maximize your business profits is by reducing your taxes. Frequently, income and other taxes could be lowered significantly if only the taxpayer were willing to plan ahead. Tips and Simple Guidelines on How to Calculate Payroll Taxes Managing a business small, medium or big requires you to pay your taxes, as well as your employees taxes. Managing a payroll can be an arduous and taxing job, no pun intended. Furnishing Evidence in E-Tax Compliance Self-assessment relies on taxpayers voluntarily meeting their tax obligations. This concept is recognised in all tax statutes, which sets out taxpayers' primary obligations, and clearly spells out that taxpayers are required to determine the amount of tax payable correctly and to pay it on time. Electronic Commerce Taxation and Pakistan Assume a buyer in Pakistan downloads software from the Internet for a 30-day trial. If he likes the software, he submits his credit card information and receives an authorization code that allows him unrestricted use of the software. Tax Trap #1 -- Waiting to Incorporate: What A Difference A Date Can Make NOTE: This is the first in a series of 5 articles: "Small Business Tax Traps and How To Avoid Them"If you're a sole proprietor, perhaps you've considered incorporating your small business or self-employment activity.And so maybe you've been wondering, "When is the best time to incorporate?"From a legal standpoint, any time is the best time. How Likely Are You To Be Audited? Statistics for IndividualsUnfortunately, the IRS increased its rate of auditing individuals in 2003 when compared to 2002. The increase was approximately 14%, but still constituted only 6. Anticipating Your IRS Refund Can Cost You Plenty While accountants are reaching for aspirin, millions of Americans are reaching for some fast cash this tax season. Unfortunately, those who reach for fast cash in the form of a "refund anticipation loan" are getting hit with interest rates and fees that are out of this world. Tax Audits: What Signs Make You More Likely to be Audited by the IRS? It's a major fear for most Americans: A notice from the Internal Revenue Service (IRS) summoning you for an audit.What is it about these three letters that strikes a cord of fear in Americans' hearts? Learning the signs that could put your tax return at the top of the list for an audit, and avoiding them if possible, may put your mind at ease. Correspondence From The IRS - Yikes! It's a moment every person dreads. You pick up the mail and there is an envelope from the IRS. Access to E-records by Taxing Authorities: A Case for Pakistan (Part II) All tax authorities to e-commerce transactions should investigate the record retention requirements of each other's respective jurisdictions.In September 1998 Revenue Minister Dhalinal of Canada;"?Interpretation Circular 78-10RS and 779R (Book and Record Retention/Destruction) will be revised to explain the Department's views with respect to the electronic environment. 1031 Exchange Rules and Requirements Following is a reproduction of the IRS's rules and requirements for 1031 tax deferred exchanges with regards to real property. If you have any questions regarding the sale of your real property or questions about what qualifies for a 1031 exchange or not, please consult your tax professional. Income Tax Returns Your Accountant Should Not File You've been feeling uneasy (perhaps even guilty) because you've failed to report your under the table business income. Perhaps you've never filed a tax return, even though you know you owe money. Save Money on Taxes - Let Uncle Sam Pay for Your Fun! "Deducting Meals and Entertainment"O.K. How to Cut Duty Cost and Increase Profit as an Importer Import duties continue to be significant elements in the cost of international trade. Yet many companies and businesses still pay more duties than the law requires - which impacts adversely on landed cost and ultimately on business profitability. How to Donate Your Car to Charity and Get Tax Deduction Donating your used car to charity is a win-win situation; the charity gets your gift and you get tax deduction. Below are some simple steps to make a car donation. Small Businesses: Company Car Vs. Personal Mileage Reimbursement In Hurricane Katrinas Wake With gas prices at an all time high before Hurricane Katrina left her mark on our nation, most Americans were hoping that gas prices would settle down once summer passed. But gas prices have jumped as much as 80 cents a gallon across the country once Hurricane Katrina destroyed the Gulf Coast and impacted all of our lives. Employment Taxes - What Are They? If you have employees, you are responsible for paying a variety of taxes at the federal, state, and local levels. You must also withhold certain taxes from the paychecks of your employees. Your IRS Tax Appeal Rights Are you in the middle of a disagreement with the IRS? One of the guaranteed rights for all taxpayers is the right to appeal. If you disagree with the IRS about the amount of your tax liability or about proposed collection actions, you have the right to ask the IRS Appeals Office to review your case.
|
| Good Credit Loans | home | site map | School Bus Clothing | Florida Pool Heating |
| © 2006 |
