Estate Tax What It Is And How It Is Filed

Estate Tax: What It is​ And How It is​ Filed
According to​ the​ Internal Revenue Service (IRS),​ an​ Estate Tax is​ a​ tax that is​ imposed on​ your right to​ transfer your property and belongings after your death .​
The individual who is​ in​ charge of​ handing and filing an​ Estate Tax return is​ often the​ estate representative .​
An estate representative can be a​ family attorney or​ a​ family member who was declared the​ executor of​ an​ estate in​ a​ will .​
When dealing with an​ Estate Tax,​ there are number of​ things that an​ individual or​ family must do when preparing to​ deal with the​ Internal Revenue Service (IRS).
There are certain restrictions for estates that are subject to​ the​ Estate Tax .​
Each year tax laws are updated or​ completely changed; therefore,​ estate representatives or​ family members are encouraged to​ review the​ new Estate Tax laws .​
At the​ current time,​ the​ majority of​ estates are not subject to​ an​ Estate Tax if​ they are valued at​ less than one million fifty thousand dollars .​
The Estate Tax value is​ expected to​ increase up to​ two million dollars for the​ 2018 year .​
In addition to​ meeting a​ certain estate value,​ it​ is​ also likely that the​ majority of​ properties that are jointly owned will not be taxed if​ at​ least one property owner is​ still living .​
An Estate Tax return is​ due to​ be submitted to​ the​ Internal Revenue Service (IRS) nine months after the​ estate owner passed away .​
As with regular tax returns,​ it​ is​ possible for estate representatives or​ family members to​ obtain a​ deadline extension .​
If tax is​ owed on​ the​ estate,​ it​ still needs to​ be paid before the​ nine months arrives even if​ an​ Estate Tax return deadline was granted .​
Not paying the​ estimated amount of​ estate taxes due can result in​ late fees or​ additional penalties .​
The Internal Revenue Service (IRS) will determine the​ amount of​ Estate Tax owed by taking the​ fair market value of​ all property items that were previously owned by the​ estate owner before he or​ she passed away .​
Fair market value takes into account when an​ item was purchased and exactly how much it​ is​ worth today .​
When all of​ those items are added up the​ total is​ referred to​ as​ the​ Gross Estate .​
As with traditional tax returns,​ estate taxes are allowed tax credits and tax deductions .​
When all of​ these items are computed together the​ amount of​ tax owed will be determined .​
When an​ Estate Tax return is​ being filed with the​ Internal Revenue Service (IRS) there are a​ number of​ other important documents that must be sent along with the​ return .​
These items include a​ copy of​ a​ death certificate,​ copies of​ property appraisals,​ copies of​ litigation documents that may apply to​ the​ estate property,​ and a​ copy of​ the​ deceased’s will .​
As previously mentioned,​ an​ Estate Tax return can be filed by a​ lawyer,​ an​ estate representative,​ or​ a​ family member .​
Individuals can acquire the​ Form 706: United States Estate (and Generation - Skipping Transfer) Tax Return by contacting the​ Internal Revenue Service (IRS) or​ by downloading the​ form online.
Only a​ small percentage of​ Americans are required to​ file for an​ Estate Tax return; however,​ that does not mean that taxpayers do not need to​ know and understand what an​ Estate Tax is​ .​
a​ taxpayer may not own a​ high valued property; however,​ that does not mean that they cannot inherit one or​ be named an​ estate representative by a​ friend or​ family member who has passed on.

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