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Taxes

Here’s What Estate Taxes Look Like in Georgia

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estate taxes in georgia

Many people worry about estate taxes, either for themselves or for loved ones. Estate taxes leave individuals who inherit part of an estate with a potential financial burden, as they may owe taxes on the value of the estate. As a result, many people wonder what estate taxes look like on the state level as well as the federal level. If you’re curious about estate taxes in Georgia, here’s what you need to know.

What Is an Estate Tax?

Estate taxes are financial obligations placed against the value of an estate left by a deceased person. At times referred to as the “death tax,” it’s a financial obligation associated with the value of the property involved.

It is important to note that estate taxes and inheritance taxes are not the same things. An estate taxed is levied before any heirs receive money or property. Inheritance taxes are only assessed after an heir receives any funds or property they are receiving from the deceased.

Is There a Georgia Estate Tax?

No, there is no Georgia estate tax. In 2014, OCGA § 48-12-1 went into effect, eliminating estate taxes at the state level. It all ensured that no estate tax returns were required by Georgia.

Does Georgia Have an Inheritance Tax?

No, Georgia does not have an inheritance tax. However, Georgia residents may still be on the hook for inheritance taxes if the state where the deceased lived has legislation allowing out-of-state individuals to be subjected to its inheritance tax requirements.

Are Georgians Exempt from Federal Estate Taxes?

No, Georgia residents are not exempt from federal estate taxes, even if they aren’t paying estate taxes at the state level. Whether Georgians will own any federal estate taxes depends on the overall value of the estate.

What Federal Estate Taxes Look Like

How much a person owes in federal estate taxes depends on the value of what they receive from the estate. After any available exemption, you could owe 18 to 40 percent in taxes, depending on the taxable amount.

For 2020, the estate tax exemption is set at $11.58 million for individuals and $23.16 million for married couples filing jointly. If the value of what the heir will receive is at or below the exemption, they do not owe federal taxes on that amount. If the value exceeds the exemption, the amount above the exemption is taxable.

For 2021, the exemptions are increasing. Single taxpayers exemption is $11.7 million. For married couples, it is $23.4 million.

Get all of your tax questions answered with H&R Block’s Tax Information Center!

5. Mortgage Refinancing Points

Spousal Exemptions

It is important to note that spouses don’t have to worry about exemptions. One spouse can inherit an unlimited amount of a deceased spouse without having to worry about estate taxes.

However, there is a chance these high-value exemptions won’t remain in place. President-elect Joe Biden has announced that he may attempt to return the exemptions to 2009 levels, lowering it to a $3.5 million exemption per person.

Are you concerned about estate taxes in Georgia, either for loved ones who inherit your estate or as a potential heir? Why or why not? Share your thoughts in the comments below.

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Comprehend the Common Tax Problems and Get Ready for the Future

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The tax filing season comes with stressful times for people all across the country. Tax filers find themselves stuck with tax problems and other intimidating situations, which are difficult to resolve. Minor errors and compliance issues can take a dig at the financial situation of a person. The experts thus recommend taking out time for researching solutions to solve the tax controversies you’re facing.

[Read more…] about Comprehend the Common Tax Problems and Get Ready for the Future

5 Types of Financial Advisors

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Types of Financial Advisors

One of the smartest things that you can do for yourself is to hire the right professionals to advise you in life. For example, when it comes to money matters, you want to get advice from people who are skilled in personal finance. However, did you know that there are different types of financial advisors? You want to make sure that you hire the one that best suits your needs. To get you started, here are 5 types of financial advisors that you should know about:

1. Certified Financial Planners

These types of financial advisors assist you in planning out all aspects of your finances. Therefore, if you need assistance with budgeting, saving, and planning for your financial future, then you might want to start here. After all, if you don’t get those basics down, then you’re going to have a hard time with more advanced financial activities. Getting the right professional to assist you with really laying that foundation can go a long way towards improving your financial world.

2. Investment Advisors

Maybe you feel like you already know what you want to know about financial planning. You have a strong budget, you’re paying down your mortgage, and you have a retirement plan. However, you want to make more money through investments. Obviously, investing offers a lot of options like the Motely Fool. Why not hire someone who is able to help guide you through those options? After all, if someone else has an in-depth understanding of how you can meet your investment goals, it’s only smart to take their advice. These types of financial advisors like the Motely Fool , therefore, are quite popular.

Note that within investment advising, you also have additional specific options. They include working with mutual fund representatives, and insurance agents. If you are very wealthy, then you might work with a wealth advisor. If you want a more affordable option for investment guidance then you might work with a roboadvisor.

3. Tax Advisor

Do you feel like you’re not quite getting the most out of your taxes? Or perhaps that you’re not getting the details right even though you file regularly? Then you might be interested in the types of financial advisors that help with that. Look for a planner or advisor who offers tax advice. This is particularly helpful if you’re an independent contractor or own your own business. In other words, if you have a more advanced tax situation than the average person, a professional can help you out. You may work with a tax advisor or a general accountant to meet these goals.

4. Financial Attorney

Sometimes you need someone specifically to advise you about the legal issues related to your finances. For example, look at this option when you’re doing estate planning, setting up a living trust or will, or otherwise making contract-based decisions for your future. These are the times when you want an attorney to advise you.

5. Money Psychologists

Many of us have underlying emotional challenges or psychological beliefs that negatively impact the way that we handle money. In particular, this can lead to money problems in our relationships. However, it can truly impact all aspects of our financial lives.

Therefore, you might find that the professional that you need is a therapist. There are therapists out there who specialize in assisting you in working through your money challenges. If you feel like you have the practical advice down, then you might need one of these more outside-the-box types of financial advisors.

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If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started. If you want to be able to customize your blog on your own domain and need hosting service, we recommend trying BlueHost. They offer powerful hosting services for $3.95/month!

What Does Joe Biden Have In Store For Our Taxes?

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Joe Biden

It’s almost time, people. The election is coming up tomorrow, and whoever you’re voting for, you want it to be over. For those who may still be considering who to vote for, there are a few points of concern for each candidate. Among other probable flaws of a Joe Biden presidency, there is a concern that he may raise taxes on the middle class. Does this have any merit?

Why Is This a Question?

My biggest issue is that this is even a question. Biden has yet to actually release a comprehensive tax plan, but has vague promises of a miracle tax on the rich that will pay for his lofty spending goals. The reason people are concerned about tax increases under Biden is that he has some proposed plans for the climate and healthcare that would cost a great deal of money. If Biden just itemized those initiatives, estimated costs, and released a tax plan that could cover those costs, we wouldn’t have to wonder.



Won’t He Only Raise Taxes on Those Making $400k or More?

As far as Joe Biden says, his tax plan will pay for everything he plans to initiate in his presidency with a simple wealth tax on those making $400k or more, along with some alterations to tax code to close loopholes. In fact, he even promises lower taxes through credits for low-income Americans and small business owners. The issue is, that is such an obvious fairytale that it is a wonder how news media continues to perpetuate it.

This isn’t a partisan opinion, it is simple math. We wouldn’t even be able to close our current deficit under a tax plan like that; even if you could, it would take so much money away from those making $400k+ that we would almost immediately see a mass exodus of jobs and commerce from the US.

Get all of your tax questions answered with H&R Block’s Tax Information Center!

5. Mortgage Refinancing Points

Politicians Never Tell the Truth About Taxes

If that wasn’t enough, politicians also have a long history of lying about this particular subject. Trump and the GOP’s tax plan touted massive decreases in taxes on middle income Americans, but the difference was fairly insignificant. Obama (with Joe Biden as his VP) promised lower taxes for low income Americans; they then proceeded with over 20 initiatives to raise taxes that all affected those citizens.

Consider Platform Spending

Trump has been no stranger to spending. He added even more of a deficit to the already record-breaking spending of the previous administration (yes, even before COVID hit). That being said, the Democrats openly and explicitly want to enact several policies that will massively outspend anything the GOP would put on the table. The money that the Democrat Party wishes to spend has to come from somewhere.

In Summary

The short answer: We don’t know what will happen with our taxes if Biden is elected. If you take his word for it, the wealthy will be garroted; that will have its own consequences.

The more likely possibility, going off of his party’s history, and the history of the administration for which he served as VP: Everybody’s taxes are going up. He may not do it through income tax or payroll taxes, but sales taxes and any other sneakier methods are almost certain to make an appearance. If they don’t, and Biden enacts even one of his spending plans, he will have such a historic deficit that he risks never being re-elected. He will be much more likely to raise your taxes than to risk losing, as politicians always are.

How to get $250,000 from the US R&D Tax Credit Program to Fund your Business

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The global economy is in a state of turmoil and many businesses, particularly small businesses and startups, are desperately looking to their governments as the last resort for financial assistance to help them survive the recession and avoid bankruptcy. While many countries have financial relief programs in place, most of these programs are due to expire soon and only cover a short time frame.  [Read more…] about How to get $250,000 from the US R&D Tax Credit Program to Fund your Business

How to Save Now for Next Year’s Tax Payment

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next year's tax payment

If you anticipate needing to make a tax payment next year, it’s wise to start saving as soon as possible. That way, gathering the money together is less of a burden. Plus, it could mean the difference between getting enough cash ready and coming up short. If you want to start saving now for next year’s tax payment, here’s how to go about it.

Do a Tax Payment Estimate to Determine How Much You Need

Before you can figure out how to save, you need to know exactly how much you’ll need. Usually, your best bet is to do a tax payment estimate. You’ll provide some details about your financial situation. Then, you can do some basic calculations.

Precisely how you approach this depends on your unique situation. Employed tax filers, self-employed individuals, and business owners all have to use different approaches.

In most cases, employed individuals can take advantage of the IRS Withholding Calculator. While its main purpose is to help you update your Form W-4, you can use it to estimate your liability as well.

Self-employed people and small business owners have to account for self-employment taxes, so they need to use a different calculator or do that math manually. Generally, that means planning on handing over 15.3 percent of their net profit to cover that tax specifically. They’ll also owe income taxes and, potentially, business-related taxes, which may have to be tabulated separately if the calculator doesn’t account for it.

Do the Math to Figure Out How to Save for Next Year’s Tax

Once you know how much you’ll need to pay, you can come up with a savings plan. First, take the total number. Next, divide it based on when you want to stash money away.

For example, if you want to set money aside every month, divide the total by the number of months you have before the tax payment is due. If you would rather divide it by the number of paychecks, weeks, or any other period between now and then, you can do that as well.

The idea is to identify a specific number that you’ll set aside each time. That way, you can potentially automate your savings, scheduling a deposit to occur at your chosen interval.

Find Opportunities to Save on Next Year’s Tax

Even if you feel that the money you need to set aside to handle next year’s tax payment is reasonable, that doesn’t mean you should forgo opportunities to save. Many tax-smart moves do more than lower your obligation; they also allow you to plan for your future, get reductions you are owed, and more.

First, make sure you track any financial activity that could be deductible. This is especially true for self-employed professionals and small business owners, as many expenses you have to shoulder reduce your taxable income. Keep all business- or work-related receipts. That way, you can enter those details when it comes time to calculate your taxes or create an estimate. If you are uncertain of the appropriate steps to take when it comes to projecting self-employment tax and expenses, consult with a CPA for help.

Additionally, review your participation in tax-advantaged accounts. For instance, if you are saving for retirement, your contributions may reduce your tax burden, lowering the amount you’ll owe for next year’s tax payment.

The same goes for educational expenses. Along with potentially being eligible for certain deductions, you may gain access to tax credits that allow you to pay less.

Precisely what’s available to you, again, depends on your unique situation. However, it’s always wise to spend time to explore the nuances of your finances, ensuring you are able to capture every tax savings opportunity that may be available to you.

Do you have any other tips to help people save for next year’s tax payment? Share your thoughts in the comments below.

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If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started. If you want to be able to customize your blog on your own domain and need hosting service, we recommend trying BlueHost. They offer powerful hosting services for $3.95/month!