Mark Glendon

What is The Estate-Tax Exemption?

Owning a large amount of assets is usually considered a good thing. After all, it usually signifies that you've worked hard and have made a lot of money to be able to afford real estate and other assets included in your estate. Unfortunately, having a lot of wealth tied up in your estate can result in a hefty tax burden for your heirs upon death.

What Are Estate Taxes?

In the United States, some estates are subject to a federal estate tax that ranges between 18% and 40%. Some states also have their own estate taxes, meaning it's a good idea to partner with a local trust and estate CPA if you are an individual with a high net worth.

As an example, New York City residents can look for a Bronx trust and estate CPA, but you can search for a CPA in your area. Whether you're in New York seeking out a Bronx trust and estate CPA or somewhere else in the country, the reason you want a CPA on your side is that your CPA may be able to help you find ways to save money on estate taxes, including through an exemption or trusts.

How Do Exemptions Work?

An estate tax exemption is available on the federal level for estates valued at less than $12.92 million in 2023. This means that estates valued under this amount are exempt from estate and gift taxes. Working with a trust and estate CPA may help you find ways to reduce the value of your estate by giving away assets as gifts or transferring ownership to a trust. There are legalities involved here, and these are what make it so important to work with a CPA.

The $12.92 million figure also counts as a lifetime exemption, meaning assets that you give away throughout your life count toward this exemption. If you gift over this figure during your lifetime, the difference may be taxable.

Disclaimer: The above is not financial advice. Always consult with a financial professional regarding taxes and estate planning.

Author Resource:-

Mark writes often about tax and estate planning. His articles may include topics like tax planning, estate planning, business accounting or any other tax service to help the people in needs. You can find his thoughts at estate planning blog.