Estate and Gift Taxes, Florida
- posted: Apr. 23, 2022
Florida is Tax-Friendly: Gift and Estate Tax Need-to-Knows
You know the adage, “Nothing in life is certain except death and taxes?” Well, taxes can indeed feel like death when you are sorting receipts, balancing checkbooks, paying bills, organizing expenses, and explaining incomes. And taxes, well, they are as certain as today follows yesterday, and night follows day. Having a professional take the reins will save you time and guarantee the proper forms are filled out and that you maximize your refund. Here in Florida, we get a break in that there is no gift tax, and no estate tax. However, on a federal level, you may be subject to sending Uncle Sam his cut.
Let’s start with the good news, here in Florida, we don’t have a gift tax! However, the annual exclusion is $15,000 on a federal level. Tax law is very challenging and complex. New guidelines are sent out every year, updating the ever-changing artillery of regulations. Uncle Sam keeps us on our toes for sure come tax season. According to the IRS, in 2022, this annual exclusion will be $16,000 (IRS). These exclusion changes are a throwback to the Trump administration, where he raised the amount, you can transfer to any individual without worrying about gift taxes. There’s more good news; this is applicable every year! Yes, this is an annual thing, so feel free to hand out up to $16,000 to as many people you like this fiscal year (2022) without batting an eyelash to Uncle Sam; he can’t touch it. This is just one example; it is recommended you have a licensed tax advisor analyze and prepare your taxes who can help you navigate the array of changes and updates.
Okay, so you went crazy like Oprah handing out cars did ya? Exceeded the $15,000 threshold for exemptions? Not to worry, the “lifetime exemption” might save the day. The lifetime exemption is also known as the ‘inheritance’ or ‘estate’ exemption. What this is, is the amount of money or assets the government permits you to give away over your lifetime without paying the federal gift tax. Another throwback to the Trump Tax Plan brought the 2021 lifetime gift tax exemption amount to a whopping $11.58 million in 2020 and was increased to $11.7 million in 2021. This is historically HIGH, and as with all good things, this too will eventually come to an end. In fact, in 2026, this tax exemption will fall back to only $6 million so take advantage while you can. Now on a serious note, anything over the allotted exemption amount will be taxed at 40%; yes, Uncle Sam will come knocking on the door at this point.
IRS Form 709
Let’s say you did receive a gift over $15,000 in 2021; well, you’d have to report this gift under the IRS form 709: the United States Gift (and Generation-Skipping Transfer) Tax Return. We always recommend seeking advice from a licensed tax advisor because these gifts don’t necessarily mean you have to pay taxes; however, you have to report them. At Every & Stack, we stay current on the changes and regulations, so you don’t have to.
Even in death, taxes are kept at the forefront when it comes to the IRS and Uncle Sam taking their fair share. See lifetime exemption clause… Uncle Sam can bat his eyes all he wants, but here in Florida, there is no estate tax; yes, you read that right, NO ESTATE TAX. Migration to the “Sunshine State” has exploded in the past few years, and one reason is that we are one of the most tax-friendly states. Do you suppose the sun shines brighter because there are no gift or estate taxes? Just how tax-friendly are we? Well, we don’t have a state income tax either; FYI, only SEVEN states can make that claim.
Florida proudly brandishes lower property and sale taxes, too. It is no wonder why so many people call this beautiful peninsula home. Although there is no estate tax, we highly recommend estate planning to protect your loved ones from expensive litigation and probate when the time does come. Our firm can help you take advantage of trust funds, appoint beneficiaries, and write a will to protect your estate. We can also help with guardianships, and create a ‘living will’ designed to protect your wishes and long-term care plan.
Estate Plan Lawyers
Every & Stack provides your family with peace of mind and decades of experience. We are committed to protecting your assets, and family relationships. We offer a variety of estate planning and elder law services. Call our office today to schedule an appointment. Upon request, we are available to meet clients at their homes, or care facilities. Our commitment is to our clients.
Daytona Beach Office 386-255-1925