True or False:Estate or Inheritance Tax in Florida is higher than the national average. False.Thankfully, there is no state inheritance tax in Florida.
True or False: If you inherit money in Florida, you must pay income tax on the money received. False, Beneficiaries in Florida do not pay income tax on money received from an estate because inherited property does not count as income.
True or False: Floridians do not have any Federal Estate Tax: False. Even though Florida doesn’t have an estate tax, you might still owe the federal estate tax, which kicks in for estates worth over $13.61 million for 2024.
True or False: Proper estate planning can help in taking advantage of tax deductions. True: If you do have an Estate Tax burden, properly structured estate planning can leverage available deductions, potentially reducing the overall tax burden on your estate.
True or False: A well-crafted estate plan can prevent the need for paying unnecessary taxes. True: A well-crafted estate plan can incorporate strategies to minimize unnecessary taxes, allowing more of your assets to be passed on to your chosen beneficiaries.
True or False: There are situations in which Floridians will have to pay some form of inheritance tax. True: These are some situations where you would pay taxes:
Withdrawing certain funds from retirement accounts: some income taxes can be levied on the funds withdrawn from these accounts after the account holder’s death (but withdrawals from Roth IRAs are not taxed when someone dies) receiving income from an estate: If income producing property is in an estate there may be a tax on the income received before the property is transferred to the beneficiary.
Selling inherited assets. As mentioned, income taxes don’t apply to property received directly from an estate or trust. However, if you sell property that you inherited, the funds you receive may be subject to federal income tax if the asset has gone up in value after the decedent’s passing. As an example, if you inherit stock with $20 on the date of death and sell it for $25, the $5 gain would be subject to tax.
True or False? The IRS will email you if they have a question about your return. False. The IRS will never contact you via email.
Fun Fact: Did you know the most misused Social Security number of all time was 078-05-1120? In 1938, as part of a promotion to sell wallets through Woolworth, a wallet manufacturer wanted to demonstrate how a Social Security card would fit into its wallets. A sample card was placed inside each wallet and displayed the Social Security number of the company’s secretary, Mrs. Hilda Schrader Whitcher. The sample card was half of the size of an actual Social Security card and written in red, with “Specimen” written in bold, over 40,000 people reported 078-05-1120 as their own social security number on tax returns.
Andrea L. Jakob, PA is located at 12401 Orange Drive, Suite 219 in Davie. They can be reached at 954-862-1479 or on the at www.jakoblegal.com.
