The Internal Revenue Service issued guidance on how taxpayers should report the special tax payments, refunds and rebates they received from states in recent years as a form of relief during the pandemic.
The latest information follows up on previous guidance issued by the IRS in February, which basically said most taxpayers wouldn't need to include the payments on their tax returns for 2022, making matters much easier for both taxpayers and preparers. However, that still left the questions open about what to do about any special state tax payments received this year, and the new guidance answers that question as well as others.
Notice 2023-56 describes the types of state payments for individuals and the federal tax treatment of them. It also asks for comments on the application of the rules, along with specific aspects of state payment programs or other situations in which IRS guidance would help.
The IRS pointed out that most taxpayers who receive these...
Q: Will my life insurance be subject to estate taxes?
A: It depends – if you name your living trust as your beneficiary, then yes, they could be. Then of course, the size of your estate will come into play as to whether they actually will be taxed. Given this, you want to undergo proper planning to avoid having the insurance benefits taxed.
In this video, we'll cover estate planning basics, answering the question "do I need an estate plan?" Consider this video to be estate planning 101.
If you've thought about how to avoid estate tax, who needs a will, who needs a trust -- any of these questions or concepts -- then make sure to watch this video.
Back on September 28, ProPublica published another article in its The Secret IRS Files tax series, this time turning its attention to a commonplace estate tax avoidance strategy known as the Grantor Retained Annuity Trust, or GRAT.
Check it out here and leave your comments below on whether you think this approach is justified since it's in the tax code, or if it's ripe for change.