Marylanders: Live Longer To Leave More For Your Heirs
Published Sunday, July 13, 2014 at: 7:00 AM EDT
If you're a wealthy resident of Maryland, you absolutely, positively must stick around until at least 2019 to leave more to your heirs tax-free. It would be inconsiderate to them not to live beyond 2018. While this news is doubtful to be a big factor in your decision whether to check out or not, it is nice to know Maryland is giving you a financial incentive to stay alive: estate tax reduction.
On May 15, 2014, Maryland Gov. Martin O'Malley signed into law a bipartisan bill "recoupling" the state's estate tax with federal estate taxation over the next five years. As a result, the state's stingy $1 million exemption from federal taxation, put in place just a decade ago, will grow annually until it equals the federal exemption amount. It won't be until 2019 that the Maryland and federal estate tax exemptions reach parity.
In 2019, the federal exemption, which is indexed for inflation, is expected to grow to $5.9 million.
Our advice: stick around at least through 2019 and let your heirs know you're doing them a big favor.
This article was written by a professional financial journalist for Preferred NY Financial Group,LLC and is not intended as legal or investment advice.
An individual retirement account (IRA) allows individuals to direct pretax incom, up to specific annual limits, toward retirements that can grow tax-deferred (no capital gains or dividend income is taxed). Individual taxpayers are allowed to contribute 100% of compensation up to a specified maximum dollar amount to their Tranditional IRA. Contributions to the Tranditional IRA may be tax-deductible depending on the taxpayer's income, tax-filling status and other factors. Taxed must be paid upon withdrawal of any deducted contributions plus earnings and on the earnings from your non-deducted contributions. Prior to age 59%, distributions may be taken for certain reasons without incurring a 10 percent penalty on earnings. None of the information in this document should be considered tax or legal advice. Please consult with your legal or tax advisor for more information concerning your individual situation.
Contributions to a Roth IRA are not tax deductible and these is no mandatory distribution age. All earnings and principal are tax free if rules and regulations are followed. Eligibility for a Roth account depends on income. Principal contributions can be withdrawn any time without penalty (subject to some minimal conditions).
© 2024 Advisor Products Inc. All Rights Reserved.