For years, year-end tax tips were delivered in this space every September, but this year's story is a real cliffhanger. The twist in the plot is the pending tax legislation. Ironically known as the SECURE Act, an acronym, the legislation is officially named, "Setting Every Community Up for Retirement Enhancement." The bill is likely to cause frantic last-minute tax maneuvering at the end of 2019.
After the manufacturing sector numbers for August were published on Tuesday, September 3rd, the financial press erupted with grim headlines. Largely absent from the coverage was proper context: The manufacturing purchasing managers index has predicted six of the last three recessions, and manufacturing accounts for about 12% of U.S. economic activity. Here are the facts.
The day the yield curve inverted, on Wednesday, August 14th, stocks plunged and financial headlines turned grim. Should you worry? Or is the yield curve inversion the financial fakeout of 2019?
If you own a $1 million IRA account and live in a state with a high income-tax rate, here's a financial planning tip that could save you thousands annually on state income tax. The strategy requires setting up a trust in a state with no income tax, which is probably not something you do every day. So, here's a primer.
"Financial peace of mind" is an overused term in financial services marketing. However, the help we provide in settling financial details of your estate indeed may bring you genuine-and eternal-peace of mind.
Trusts funds used to be the realm of the wealthy, providing a tool to pass money to heirs and charities. Nowadays, though, they are becoming a means for more people to engage in smart estate planning.
With summer 2019 now underway, here are three strategic mid-year tax planning tips.
Do you own a large IRA and live in a state with an income tax? Consider setting up a non-grantor trust in a state with no income tax. While this financial planning tactic may sound exotic, it's common sense and can make a material difference in your life and beyond.
In June, the economic expansion entered its eleventh year, officially setting a new record as the longest growth cycle in modern U.S. history. The previous record-setter was the 10-year expansion that bracketed the 1990s.
Bid adieu to stretch IRAs! A new tax law widely expected to become law by the end of 2019 will kill this strategy for passing on your IRAs to the next generation while minimizing the amount that goes to Uncle Sam. Adoption of the legislation is not sure, but it is highly likely, making it wise to plan now for the demise of the stretch technique.
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How Can We Help You Die In Peace?
"Financial peace of mind" is an overused term in financial services marketing. However, the help we provide in settling financial details of your estate indeed may bring you genuine—and eternal—peace of mind.
After you pass away, a personal representative, usually your executor, is required to prepare a regular income tax return in the year of your death (Form 1040). If any passive unearned income was paid to you after your death, for example, from real estate investments or businesses in which you are not an active participant, your executor must also file an estate income tax return (Form 1041). If you die this year, for example, your 1041 is going to be due on April 15th of the next year.
The executor of your estate also must apply for an EIN (Employer Identification Number). Your executor will also be responsible for informing various government entities, like the Social Security Administration, that you died. In addition, your personal representative or executor must provide detailed contact information where correspondence related to IRS and state tax filings can be sent.
In the unlikely event you have a taxable estate and trust—only about 1% of estates are federally taxable—your executor and trustee may need to file a Form 56, Notice Concerning Fiduciary Relationships, which arranges for the IRS to send tax correspondence. In addition, the estate will be required to tell the IRS if taxes will be paid annually on a calendar- or fiscal-year basis.
Where your death can become more complicated for your heirs, trustee, and executor is when they learn, after you're gone, that you underpaid the IRS. An executor or trustee would be obliged to confess to the IRS that you ran afoul of the rules and may owe them some money. Take comfort in knowing that the IRS often is forgiving about confessed mistakes.
As financial fiduciaries, we are available to counsel you on matters of trust and, yes, help you achieve financial peace of mind.
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