What do Mark Zuckerberg of Facebook and Sheldon Adelson of Las Vegas Sands Corp have in common? For one, they are highlighted on the Forbes “America’s Richest People” list. MSN has also reported that both are taking advantage of a tax loophole called the Grantor Retained Annuity Trust (GRAT) which allows wealthy Americans to direct excess earnings to their heirs without incurring the consequences of the 40 percent federal estate and gift tax.
Give to your charity of choice or the IRS
By: Julia Frey. The income tax bill for 2013 may be a rude awakening for many people. Even if you had the same amount of income in 2013 as you did in 2012, your tax bill WILL increase and may increase by a significant amount; some pundits opine a minimum of 7%. Remember, that income taxes can go up to 39.6% and capital gains taxes have increased for high income wage earners. There may also be an additional 3.8% Medicare tax on investment income. Itemized deductions have also been reduced for high income earners.
IRS Recognizes Same-Sex Marriages for Federal Tax Purposes
Yesterday, the Internal Revenue Service stated that individuals of the same sex will be considered lawfully married for federal tax purposes if they were married in a state that allows same sex marriage. This recognition will apply even if the couple resides in a state that does not recognize or allow same-sex marriage.
Small business owners – is your compensation reasonable?
If you are an employee of a company for which you are also an owner, you should consider reviewing your current compensation for its reasonableness. It is very common for small businesses to be formed as Subchapter S corporations. In these types of business, owners are also often employees of the business. The owners may be willing to take a smaller salary because they will eventually receive the business profits anyway. If this describes your business, be careful. The Internal Revenue Service continues to focus on whether compensation paid to employee owners is fair and reasonable when auditing small businesses, particularly S corporations.
You moved to Florida, do you need a new Will?
Not always, but there are several important reasons you should consult with an estate planning attorney to be sure. Most states will give effect to a Will executed properly in the state where the Will was created. However, if the testator is a Florida resident when he or she signs a Will in another state, even if the Will is properly executed in the other state, it will not be valid in Florida unless the execution also meets Florida’s requirements for the execution of testamentary documents. In other words, if a Will is signed in Minnesota at the time the individual is a Minnesota resident, and later the individual moves to Florida, the Will will be valid in Florida. On the other hand, if a Florida resident executes a Will in Minnesota which satisfies the execution requirements in Minnesota, but not in Florida, the Will is not valid in Florida. For a valid Will to be admissible to probate in Florida, it must have a self-proving affidavit executed at the same time as the Wills or the person admitting the Will must offer the testimony or a notarized Oath of one of the witnesses to the Will.