Your role as an executor or personal administrator of an estate involves a number of responsibilities. Did you know that part of your responsibility involves making sure the necessary tax returns are filed? And there might be more of those than you expect.
Here’s an overview:
Personal income tax. You may need to file a federal income tax return for the decedent for the prior year as well as the year of death. Both are due by April 15 of the following year, even if the amount of time covered is less than a full year. You can request a six-month extension if you need additional time to gather information.
Gift tax. If the individual whose estate you’re administering made gifts in excess of the annual exclusion ($14,000 per person for 2017), a gift tax payment may be required. Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, is due April 15 of the year following the gift. The filing date can be extended six months.
Estate income tax. Income earned after death, such as interest on estate assets, is reported on Form 1041, Income Tax Return for Estates and Trusts. You’ll generally need to file if the estate’s gross income is $600 or more, or if any beneficiary is a nonresident alien. For estates with a December 31 year-end, Form 1041 is due April 15 of the following year.
Estate tax. An estate tax return, Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, is required when the fair market value of all estate assets exceeds $5,490,000 (in 2017). One thing to watch for: Spouses can transfer unused portions of the $5,490,000 exemption to each other. This is called the “portability” election. To benefit, you will need to file Form 706 when the total value of the estate is lower than the exemption.
Form 706 is due nine months after the date of death. You can request a six-month extension of time to file.
Give us a call if you need more information about administering an estate. We’re here to help make your task less stressful.
Should you pay for your child’s college education? Or should your child find the financing? There are compelling arguments for both sides, but ultimately, your family needs to do what’s best for your financial situation. Most families find that a combination of both works the best.
Parents should pay.
Arguments in favor of shelling out your hard-earned cash for a son’s or daughter’s higher education can be compelling. For one thing, college is a very expensive proposition these days. A year of undergraduate study at a private university can easily top $30,000 and public in-state schools can run over $12,000. Of course, if your student decides to get an advanced degree or go to medical or law school, he or she can run up a bill exceeding the cost of your home mortgage. Advocates of this point of view ask, “Do you really want to saddle your kid with that kind of debt so early in life?”
They add that if your child ends up working to pay for college, that’s less time available for study and making friends. And, of course, friendships built in college can generate a wealth of opportunities for a future career. Also, by investing in tax-deferred 529 plans, parents can withdraw funds free from federal and some state income taxes when it’s time for college.
The child should take the responsibility.
Others argue that covering the cost of your child’s college education should not be your priority. After all, they reason, your kid has a lifetime to pay back student loans, and making loan payments can generate a positive credit history. Advocates of this position also argue that kids who have to pay for their own tuition, books, and living expenses learn responsibility and value the investment that college represents. They also point to available tuition reimbursement plans provided by some companies or the military service option as a way to get a college education without breaking the bank.
Those on this side of the debate often argue that 529 plans are overrated as a savings vehicle because investment options can be limited and tax rules are likely to change, undermining future tax benefits. Finally, they reason that a parent’s own retirement savings should take precedence over saving for a child’s education.
Making the decision.
Of course, your family’s dynamics, the importance you place on a college education, and your personal financial priorities will factor into this decision. If you’d like help looking at the pros and cons of this important issue, give us a call.
https://www.kellerowens.com/wp-content/uploads/College-library.jpg576800Keller & Owenshttps://www.kellerowens.com/wp-content/uploads/2015/11/logo.pngKeller & Owens2017-06-01 20:50:432017-06-01 20:50:43Considering Paying for Your Child's College Education?
Indiscriminately trying to sell to “everyone” can dilute your message, muddy your image, and waste your company’s resources. To market effectively, you have to know your customers. Remember: Satisfied customers come back, and they generally refer others. Here’s how to get started.
Think about your typical customers: ages, interests, gender, aspirations, and financial and social status. In order of importance, list what customers are looking for when they come to your business. Do they seek selection, quality, price, service, or some combination? Is efficiency, expertise, or willingness to accommodate special requests particularly important to your customers? Do they demand convenience, or are they looking for atmosphere, ambience, or status?
When creating ads or other marketing tools, emphasize what your clients value, and communicate in their manner and style. For instance, low prices may not appeal to those who are more concerned with status, and ads to sell power tools rarely feature people in suits.
Getting to know your customers is mutually beneficial. You provide products and services that customers find valuable while at the same time creating revenue opportunities for your company. And isn’t that win-win dynamic the reason you started your business in the first place?
https://www.kellerowens.com/wp-content/uploads/Back-of-customers.jpg552800Keller & Owenshttps://www.kellerowens.com/wp-content/uploads/2015/11/logo.pngKeller & Owens2017-06-01 20:35:122017-06-01 20:45:47"Everyone" is Not Your Customer
How much money did you save last year? If your savings fell short of your goals, don’t give up. You can still take charge of your financial future. Here are tips to become a successful saver.
Set goals. Give your saving a purpose. Do you want to accumulate an emergency fund with enough cash to cover six months of living expenses? Other saving goals may include a college savings fund, vacation fund, or a fund for major purchases.
Treat your savings as your most important monthly bill. Write a check to savings first, or have your savings automatically deducted from your checking account or paycheck.
Take advantage of tax-deferred retirement accounts. If your employer offers a 401(k) or SIMPLE retirement plan, contribute the maximum amount allowed. No employer plan available? Contribute to an individual retirement account. The money you contribute can reduce your taxable income and grow tax-deferred.
Track your expenses. Highlight and eliminate unnecessary or wasteful spending. Control the use of your credit cards. The amount you pay each month in finance charges could go to savings instead. Get in the habit of giving yourself a regular cash allowance, and try to live with it.
For help in setting financial goals and developing a savings plan, call us.
https://www.kellerowens.com/wp-content/uploads/2012/10/save-in-red-letters.jpg447447Keller & Owenshttps://www.kellerowens.com/wp-content/uploads/2015/11/logo.pngKeller & Owens2017-06-01 20:31:032017-06-01 20:31:03How to be a Successful Saver
The tax implications of marriage are probably not the first thing on the minds of most newlyweds, but paying a little attention to it now can save time and even money later. Here are a few tips to help those who are about to embark on a new life together.
Tip 1: Notify the Social Security Administration with any name change(s). The IRS has a name match program with the SSA and will potentially reject deductions and joint filing if the name change is not made timely. Do this by filing Form SS-5 with the SSA.
Tip 2: Use Form 8822 to update your address with the IRS if either of you is moving.
Tip 3: Change your name and addresses with your employer and the Postal Service to ensure your W-2s are correctly stated and delivered to the proper address.
Tip 4: If selling one or two residences, make sure you review how capital gains tax laws apply to your situation. This is especially important if one of you has been in your home for only a short time or if either home has appreciated in value.
Tip 5: Review legal documents to ensure legal titles are as you wish them to be. This includes bank accounts, titles on property, credit cards, insurance policies, and living wills.
Tip 6: Recalculate your payroll withholdings and file a new W-4. If both newlyweds work, your combined income could put you into a higher tax bracket. This phenomenon is referred to as “the marriage penalty.” By changing withholdings now, you can avoid a big surprise at tax time.
Tip 7: Review your employee benefits and make necessary changes in health care, insurance, retirement account beneficiaries, and tax-preferred spending accounts. Marriage is a qualified event to make mid-year changes by most employees.
If you or someone close to you has questions about marriage and taxes, give us a call. We’d love to help.
https://www.kellerowens.com/wp-content/uploads/2015/08/wedding-flowers-rings.jpg365548Keller & Owenshttps://www.kellerowens.com/wp-content/uploads/2015/11/logo.pngKeller & Owens2017-05-16 02:25:292017-05-16 02:25:29Tax Tips for Newlyweds
Tax Filing Responsibilities of Estate Executors
/in Newsletter /by Keller & OwensYour role as an executor or personal administrator of an estate involves a number of responsibilities. Did you know that part of your responsibility involves making sure the necessary tax returns are filed? And there might be more of those than you expect.
Here’s an overview:
Give us a call if you need more information about administering an estate. We’re here to help make your task less stressful.
Considering Paying for Your Child’s College Education?
/in Newsletter /by Keller & OwensShould you pay for your child’s college education? Or should your child find the financing? There are compelling arguments for both sides, but ultimately, your family needs to do what’s best for your financial situation. Most families find that a combination of both works the best.
Parents should pay.
Arguments in favor of shelling out your hard-earned cash for a son’s or daughter’s higher education can be compelling. For one thing, college is a very expensive proposition these days. A year of undergraduate study at a private university can easily top $30,000 and public in-state schools can run over $12,000. Of course, if your student decides to get an advanced degree or go to medical or law school, he or she can run up a bill exceeding the cost of your home mortgage. Advocates of this point of view ask, “Do you really want to saddle your kid with that kind of debt so early in life?”
They add that if your child ends up working to pay for college, that’s less time available for study and making friends. And, of course, friendships built in college can generate a wealth of opportunities for a future career. Also, by investing in tax-deferred 529 plans, parents can withdraw funds free from federal and some state income taxes when it’s time for college.
The child should take the responsibility.
Others argue that covering the cost of your child’s college education should not be your priority. After all, they reason, your kid has a lifetime to pay back student loans, and making loan payments can generate a positive credit history. Advocates of this position also argue that kids who have to pay for their own tuition, books, and living expenses learn responsibility and value the investment that college represents. They also point to available tuition reimbursement plans provided by some companies or the military service option as a way to get a college education without breaking the bank.
Those on this side of the debate often argue that 529 plans are overrated as a savings vehicle because investment options can be limited and tax rules are likely to change, undermining future tax benefits. Finally, they reason that a parent’s own retirement savings should take precedence over saving for a child’s education.
Making the decision.
Of course, your family’s dynamics, the importance you place on a college education, and your personal financial priorities will factor into this decision. If you’d like help looking at the pros and cons of this important issue, give us a call.
“Everyone” is Not Your Customer
/in Newsletter /by Keller & OwensIndiscriminately trying to sell to “everyone” can dilute your message, muddy your image, and waste your company’s resources. To market effectively, you have to know your customers. Remember: Satisfied customers come back, and they generally refer others. Here’s how to get started.
Think about your typical customers: ages, interests, gender, aspirations, and financial and social status. In order of importance, list what customers are looking for when they come to your business. Do they seek selection, quality, price, service, or some combination? Is efficiency, expertise, or willingness to accommodate special requests particularly important to your customers? Do they demand convenience, or are they looking for atmosphere, ambience, or status?
When creating ads or other marketing tools, emphasize what your clients value, and communicate in their manner and style. For instance, low prices may not appeal to those who are more concerned with status, and ads to sell power tools rarely feature people in suits.
Getting to know your customers is mutually beneficial. You provide products and services that customers find valuable while at the same time creating revenue opportunities for your company. And isn’t that win-win dynamic the reason you started your business in the first place?
How to be a Successful Saver
/in Newsletter /by Keller & OwensHow much money did you save last year? If your savings fell short of your goals, don’t give up. You can still take charge of your financial future. Here are tips to become a successful saver.
For help in setting financial goals and developing a savings plan, call us.
Tax Tips for Newlyweds
/in Newsletter /by Keller & OwensThe tax implications of marriage are probably not the first thing on the minds of most newlyweds, but paying a little attention to it now can save time and even money later. Here are a few tips to help those who are about to embark on a new life together.
Tip 1: Notify the Social Security Administration with any name change(s). The IRS has a name match program with the SSA and will potentially reject deductions and joint filing if the name change is not made timely. Do this by filing Form SS-5 with the SSA.
Tip 2: Use Form 8822 to update your address with the IRS if either of you is moving.
Tip 3: Change your name and addresses with your employer and the Postal Service to ensure your W-2s are correctly stated and delivered to the proper address.
Tip 4: If selling one or two residences, make sure you review how capital gains tax laws apply to your situation. This is especially important if one of you has been in your home for only a short time or if either home has appreciated in value.
Tip 5: Review legal documents to ensure legal titles are as you wish them to be. This includes bank accounts, titles on property, credit cards, insurance policies, and living wills.
Tip 6: Recalculate your payroll withholdings and file a new W-4. If both newlyweds work, your combined income could put you into a higher tax bracket. This phenomenon is referred to as “the marriage penalty.” By changing withholdings now, you can avoid a big surprise at tax time.
Tip 7: Review your employee benefits and make necessary changes in health care, insurance, retirement account beneficiaries, and tax-preferred spending accounts. Marriage is a qualified event to make mid-year changes by most employees.
If you or someone close to you has questions about marriage and taxes, give us a call. We’d love to help.