Understanding taxes can be daunting, especially when it comes to estate and inheritance taxes. As 2024 unfolds, it’s crucial to grasp how these taxes operate, both federally and at the state level. This guide will break down these concepts in layman’s terms, with a special focus on New York State’s estate tax.<\/p>\n
What is Federal Estate Tax?<\/strong> State Estate Taxes: New York vs. Florida\u2019s Approach<\/strong> Inheritance Tax Explained<\/strong> 2025: Changes and Implications<\/strong> In Summary<\/strong> We Can Help!<\/strong> Understanding taxes can be daunting, especially when it comes to estate and inheritance taxes. As 2024 unfolds, it’s crucial to grasp how these taxes operate, both federally and at the state level. This guide will break down these concepts in layman’s terms, with a special focus on New York State’s estate tax. What is Federal […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-505","post","type-post","status-publish","format-standard","hentry","category-news","has-post-title","has-post-date","has-post-category","has-post-tag","has-post-comment","has-post-author",""],"_links":{"self":[{"href":"https:\/\/talhamlawoffice.com\/site\/wp-json\/wp\/v2\/posts\/505","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/talhamlawoffice.com\/site\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/talhamlawoffice.com\/site\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/talhamlawoffice.com\/site\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/talhamlawoffice.com\/site\/wp-json\/wp\/v2\/comments?post=505"}],"version-history":[{"count":2,"href":"https:\/\/talhamlawoffice.com\/site\/wp-json\/wp\/v2\/posts\/505\/revisions"}],"predecessor-version":[{"id":508,"href":"https:\/\/talhamlawoffice.com\/site\/wp-json\/wp\/v2\/posts\/505\/revisions\/508"}],"wp:attachment":[{"href":"https:\/\/talhamlawoffice.com\/site\/wp-json\/wp\/v2\/media?parent=505"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/talhamlawoffice.com\/site\/wp-json\/wp\/v2\/categories?post=505"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/talhamlawoffice.com\/site\/wp-json\/wp\/v2\/tags?post=505"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nThe federal estate tax is essentially a tax on the transfer of wealth upon someone’s death. However, it only kicks in if the deceased person\u2019s estate exceeds a certain value. For 2024, this exemption threshold is set at $13.6mm for individuals. This means if the total value of the estate is less than this amount, it escapes federal estate tax. Married couples get double that amount.<\/p>\n
\nState estate taxes are similar to the federal estate tax but are governed by individual state laws. In New York, the estate tax applies to estates that exceed the state exemption limit, which is notably lower than the federal limit. For 2024, New York’s exemption amount is $6.11mm. The tax rates for estates above this value range up to 16%. This lower threshold means that some estates may not owe federal tax but could still be liable for state tax in New York. However, in Florida, there is no Estate Tax on the fruits of your life\u2019s bounty on a state level. Only the Federal Tax is applied if an individual exceeds the minimum threshold amount.<\/p>\n
\nInheritance tax is a separate concept. It’s a tax imposed on what beneficiaries receive from an estate, rather than on the total value of the estate itself. Not every state levies this tax, and for those that do, the rules and rates vary. The key point here is that the tax is paid by the person inheriting the money or property, not by the estate. There is currently no inheritance tax in Florida.<\/p>\n
\nThe current estate tax exemption, set under the Tax Cuts and Jobs Act of 2017, is scheduled to sunset in 2025. This means that the significantly increased exemption amounts for estate and gift taxes, which have been adjusted for inflation annually since 2018, are set to revert to their pre-2017 levels. Post-2025, unless new legislation is passed, the exemption amounts will return to approximately $5.5 million per individual, adjusted for inflation. This change could have a significant impact on estate planning strategies, potentially subjecting more estates to federal estate taxes. It’s important for individuals and families to work with an estate planning attorney to reduce or eliminate tax due.<\/p>\n
\n-Federal Estate Tax: Affects large estates, with the 2024 exemption at $13,610,000. This number is set to decrease significantly in 2025.
\n-Florida Estate Tax: It\u2019s still $0.00.
\n-Inheritance Tax: Paid by beneficiaries, not applicable in all states, and varies where it is applicable.<\/p>\n
\nThis stuff is confusing \u2013 we get it! That\u2019s why we discuss taxes at every Peace of Mind Planning Session. You\u2019ll fill out a questionnaire before we meet so we can calculate your potential tax liability at your session. If you\u2019re above the limits, we\u2019ll share strategies for reducing or eliminating your taxes altogether. The session is normally $250, but we\u2019ll waive that fee if you mention this blog post. Book today HERE<\/a>:\u00a0 Space is limited, so don\u2019t delay!<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"