Federal and State Tax Exemptions
Federal Tax Exemptions
Business entities, trusts, ownerships (e.g., joint, individual or corporate), on-shore or off-shore assets, the types and values of the assets, whether foreign taxes have been paid in relation to those assets, length of the holding period of the assets, and a number of other factors. Annual and lifetime exemptions for inheritance and gift taxes are also possible. Additionally, tax treatment of assets are dependent on the total value of the assets owned in the year of the owner’s death.
A federal or state tax exemption, simply means that an individual or group does not have to pay a tax that applies to other non-exempt individuals or groups. Federal or state tax exemptions that may apply are based on income level, veteran status, disability, or other individual status factors. Income and income source along with many other factors will also determine the availability of state and federal tax exemptions. The use of state and federal tax exemptions will offset the amount of taxes due.
State Tax Exemptions
In addition to federal tax requirements, state-level taxes vary widely and may be levied on an estate, other assets, or income. For example, the State of Nevada does not levy any corporate or individual income taxes. Alternatively, in states such as California, they not only levy corporate and individual taxes, but also levy other types of taxes, such as the Franchise tax. Also relevant are the state in which income is earned, the annual income size, the locations of income, and sources of income. Consequently, the sizes and types of state taxes levied and the exemptions available to offset those taxes, vary significantly by state. Clark County has a very positive tax structure and climate for businesses, making Las Vegas and Henderson a wonderful home to many companies.
Do I need a lawyer to help me with tax exemptions?
If an individual decides to do their own taxes, they likely do not need the help of a CPA* or lawyer to help them with their tax exemptions. However, those who own a business, rental properties, or have a complexity of assets may find that consulting with a lawyer or CPA* can help decrease tax obligations. The optimal asset protection strategies and solutions can be selected only after a detailed review and evaluation of the complete life circumstances and inheritance goals of the asset owner(s). As a result of that process the asset owner can thereby secure all the available state and federal exemptions to which they may be entitled under law.
Greg Smith is an experienced estate planning attorney with 20 years’ experience as a Certified Public Accountant (CPA*) specializing in taxation. As an lawyer and CPA*, Greg Smith will maximize the benefit of your assets to you and your heirs.
Contact Smith & Shapiro today at either our Las Vegas or Henderson location from 8:00am – 5:00pm, Monday through Friday, to schedule an appointment. (702) 318-5033