I got divorced last year and will be filing taxes separately from my ex for the first time. We have two kids and share joint custody. Who gets to claim them on their income tax forms for deductions? Claiming a child as a dependent on your tax returns can be […]
Dear Ask the Attorney: With all of the discussion lately about the “fiscal cliff,” I’ve heard a lot about the federal estate and gift taxes, but isn’t there an amount I can gift to my children each year that is not subject to gift taxes? What am I missing here, […]
While much has been written about the tremendous opportunity the current federal estate tax laws provide for individuals with assets over $5 million (including our August 2012 newsletter), little attention has been paid to individuals with estates of a lesser value who live in New Jersey. If you are one of those people, congratulations, New Jersey has the worst state estate tax regime in the country. Our great state not only has one onerous death tax, but two – the New Jersey Estate Tax and the New Jersey Inheritance Tax.
On December 17, 2010, Congress enacted what we know as the 2010 Tax Act, changing the estate, gift and generation-skipping transfer (“GST”) tax regime. Before the passage of the Act, the federal estate tax exemption – the amount that an individual can pass to his or her beneficiaries tax-free – increased in steps from $675,000 per individual in 2001 to, ultimately, $3.5 million per individual in 2009. In 2010, the federal estate tax was eliminated; but only temporarily. Under prior law, the federal estate tax was scheduled to return in 2011 with a maximum tax rate of 55 percent and a $1 million exemption, meaning that if a decedent’s estate exceeded $1 million, such excess would be taxed at a 55 percent rate.