There has been much concern lately over a possible estate tax rate increase for higher-income people, leaving many of those with inherited wealth wondering how much more they will be paying in the future. As experts in tax, accounting and advisory services, Janathan L. Allen, APC has heard a lot of these concerns from our clients, and is here to help provide accurate information on this and other important financial issues. Regardless of any changes in the tax laws, we can help clients plan for a financially secure future.
According to a recent NBC Politics blog written by national affairs writer Tom Curry, this change to the estate tax has been largely left out of the discussions about tax equity in public speeches and radio addresses. Curry writes, however, that if the legislature doesn’t alter the law, the highest estate tax rate will go from 35 to 55 percent next year. Furthermore, it will be applied to estates worth more than $1 million, instead of the current $5.08 million. This would result in $37.6 billion of revenue in 2013 and an additional $62 billion by 2019, according to the Tax Policy Center, a nonpartisan Washington policy institute.
This is a stark contrast from the proposals of the president’s former opponent, Mitt Romney, who supported eliminating the estate tax altogether. And then there are some, such as Responsible Wealth project director Mike Lapham, who want to see estate taxes go even higher than the president has proposed. For people like Lapham and other supporters of a higher estate tax, it all comes down to revenue and tax equity. For those who plan to rely on an estate for their retirement and/or to ensure a solid financial future for their heirs, on the other hand, such a sharp increase in the tax rate may seem like too much of an adjustment to make.
President Obama has put another estate tax rate increase proposal on the table, however, that would bring back the 45 percent tax rate from 2009. This plan would exempt the first $3.5 million of an estate, placing a higher burden on those with larger estates. This plan would raise as much revenue as $31.5 billion by 2019.
There is still much debate and uncertainty regarding what sort of plan will go through. Whatever happens, businesses and individuals should be able to weather the financial storm with strong advisory services from the tax and accounting experts.
For assistance with your estate planning needs, please give us a call at 866-631-3470 to schedule an initial consultation with one of our legal professionals.
