Blog

Tax Law & IRS Defense

Trust Distributions to Beneficiaries under a HEMS or Ascertainable Standard

January 13th, 2023

Posted in Asset Protection,Tax Law & IRS Defense,Wills, Trusts & Estate Planning

“HEMS” stands for “health, education, maintenance, and support” and is commonly referred to as an “ascertainable standard”. If there is a HEMS provision in a Trust, the money distributed can only be used for specific needs of the beneficiary related to health, education, living expenses, or other needs or support that a Trustee can ascertain. Some examples include health insurance, surgery, exercise equipment, prescriptions, tuition, career training, rent, mortgage payments, home repairs, taxes, legal fees, vacations, or other reasonable comforts.


Continue Reading »
Share Button

Portability & Timing of Transferring the Estate Tax Exemption to a Surviving Spouse

September 16th, 2022

Posted in Probate & Guardianship,Tax Law & IRS Defense,Wills, Trusts & Estate Planning

An estate tax return (Form 706) must be filed if the gross estate of a decedent, increased by the decedent’s adjusted taxable gifts and specific gift tax exemption, is valued at more than the filing threshold for the year of the decedent’s death. The filing threshold for 2022 is $12,060,000. The threshold is adjusted for inflation and increases each year. An estate tax return also must be filed if the estate elects to transfer any deceased spousal unused exclusion (DSUE) amount to a surviving spouse, regardless of the size of the gross estate or amount of adjusted taxable gifts. The election to transfer a DSUE amount to a surviving spouse is known as the “portability” election.


Continue Reading »
Share Button

Using Payment Apps for Business

July 27th, 2022

Posted in Business & Corporate Law,Tax Law & IRS Defense

You have probably used payment apps like Venmo or Zelle to transfer money to a friend or make a payment to a business. Think of these payment apps as a faster way to transfer money when compared to prior formats such as PayPal or Stripe. Recently, there was a provision in the American Rescue Plan Act of 2021 that reduced the threshold for these type of transactions from $20,000 or 200 transactions to $600 without regard to the number of transactions, resulting in businesses receiving Form 1099-K’s (and the IRS also receiving the tax form). This new law allows for increased potential for businesses to be audited if they do not correctly report their earnings.


Continue Reading »
Share Button

Understanding Death Taxes

February 14th, 2022

Posted in Asset Protection,Probate & Guardianship,Tax Law & IRS Defense,Wills, Trusts & Estate Planning

Many people worry about filing or paying taxes to IRS or the federal government at death. The truth of the matter is that very few need to be concerned. According to IRS data, just 0.15% of decedents needed to file an estate tax return (Form 706) in 2019, and only 0.07% will pay any estate tax. That’s lower than the historical 1% to 2% share. Note there are some states that also have an estate or inheritance tax. Florida is not one of those states.


Continue Reading »
Share Button

Important Deadlines for Taxpayers in 2022

January 21st, 2022

Posted in Business & Corporate Law,Tax Law & IRS Defense

Calendaring important IRS and tax authority deadlines can help you avoid stress. To avoid paying penalties and other tax consequences, calendar tax deadlines and plan for tax filings with your accountant and other members of your professional team. Below are few examples of important tax deadlines:


Continue Reading »
Share Button

Trust Fund Recovery Penalty for Business Employment Taxes to IRS

October 8th, 2021

Posted in Business & Corporate Law,Tax Law & IRS Defense

The Trust Fund Recovery Penalty (“TFRP”) was created to encourage prompt payment of withheld income and employment taxes such as social security taxes, railroad retirement taxes, or collected excise taxes. Typically, the employee’s money is held “in trust” until the business owner or responsible party makes a tax deposit to the IRS for the amount owed, e.g. tax withheld on IRS Form 941 Employer’s Quarterly Federal Tax Return.

Problems arise when a business owner or person responsible for collecting or paying withholds these taxes from employees but does not pay the same over to IRS. Some businesses may ignore payment because they are struggling to make ends meet or choose to spend the withheld money elsewhere. Other businesses are simply unaware of the tax obligation or the person responsible takes action contrary to what the business is aware of. Either way, the IRS will seek payment from the business and also look to apply personal liability for the TFRP to certain people who are responsible for payment and willfully do not make payment.


Continue Reading »
Share Button

Compensation & Fees for Personal Representatives, Trustees, and Attorneys in Florida Estates and Trusts

September 15th, 2021

Posted in Asset Protection,Probate & Guardianship,Tax Law & IRS Defense,Wills, Trusts & Estate Planning

Under Florida law, the personal representative of an estate (sometimes also called an executor) and the trustee of a trust are entitled to compensation, as are the attorneys who represent the personal representative and trustee.

Compensation of Personal Representative The personal representative is entitled to a commission from the estate assets, which can be calculated using a percentage of the inventory value of the probate estate assets and the income earned during administration. For a formal probate administration, the following table sets forth what amount is deemed to be reasonable compensation:


Continue Reading »
Share Button

Florida Sales Tax Rates on Commercial Leases May Reduce to 2% in 2022

August 13th, 2021

Posted in Business & Corporate Law,Real Estate Law,Tax Law & IRS Defense

A legislative bill was recently enacted that may reduce the sales tax rate on commercial leases to 2%. The timing of the decrease depends on the economic recovery of the unemployment compensation trust fund. Once this balance has reached its pre-pandemic level, the sales tax rate will adjust. You may need to periodically consult with your accountant to determine the current tax rate since it is contingent upon the amount in the employment compensation trust fund.


Continue Reading »
Share Button