The Tax Cuts and Jobs Act, enacted in December 2017, limited the itemized deduction for state and local taxes (“SALT”) to $10,000 per tax filer (or $5,000 for a married person filing separately). Although this provision is scheduled to sunset after 2025, there is a reasonable possibility that this limitation may be lifted as soon as next year, as part of a comprehensive revision of the income tax code, depending on the outcome of the upcoming elections. Continue reading “You May Be Able to Delay SALT Expenses Until 2021”
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020, changed the 2020 required minimum distribution (“RMD”) rules for any defined contribution retirement plan subject to RMD payments (such as an IRA or 401(k)). If you would have otherwise been subject to a mandatory RMD, you may choose to forgo those distributions for the 2020 year. This does not include an RMD to an individual who attained 70 ½ in 2019, who is required to take an RMD by April 2020. However, this otherwise applies to any required minimum distribution, whether the retirement account is your own or is an inherited retirement account. Continue reading “Deadline Fast Approaching re: Required Minimum Distributions”
On March 27, 2020, the bipartisan Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. In order to encourage charitable contributions at this unprecedented time, the CARES Act made some valuable changes to the way those contributions are treated on your tax return. The first change worth highlighting is the treatment of charitable contributions up to $300 as an above the line deduction for the 2020 tax year (possibly $600 for a married couple). If you do not itemize your deductions, you are eligible to take this charitable deduction. Additionally, if you itemize your deductions and make a charitable contribution of cash directly to a public charity, you are not limited to 60% of your adjusted gross income (AGI) for 2020, but instead may deduct up to 100% of your AGI for this year. Continue reading “Charitable Contributions Under the CARES Act”
Imagine you are returning to the United States after traveling abroad. You have been randomly selected for a search at the border by U.S. Customs and Border Protection (CBP). They request that you provide the passwords for both your work phone and work laptop. What do you do? As an attorney, you are likely to have privileged information on such devices. Regardless of whether you are a U.S. citizen or not, CBP can make your life difficult if you refuse. If you are a citizen or legal permanent resident, they will have to let you back into the country, but they can take temporary custody of your device for further examination. If you are not a citizen, CBP has the right to refuse you entry into the United States.
On December 20, 2017, both the House and Senate passed the Tax Cuts and Jobs Act. The bill, which was previously passed by both chambers in different versions, was consolidated into a single bill by a conference committee to work out the differences between the chambers’ respective bills. President Trump signed the bill on December 22, 2017.
The long-awaited tax bill was heavily negotiated by Republican lawmakers over the past few weeks and contains significant changes to the individual income, corporate, business and estate tax regimes. The original bill that passed the House doubled the estate tax exemption from $5.6 million for individuals in 2018 ($11.2 million for married couples) to $11.2 million for individuals ($22.4 million for married couples), with a full repeal scheduled to take effect in 2025. The original Senate bill called for a doubling of the estate tax exemption without any full repeal. The final bill that passed both chambers doubles the exemption for years 2018 to 2025, followed by a drop back to current exemption levels in 2026. There will be no repeal of the estate tax and the exemption will continue to be indexed for inflation. The final change to revert back to current levels in 2026 was made to satisfy Senate parliamentary restrictions to ensure that the overall tax bill fell within budgetary limitations, in order to pass the bill by a simple majority.
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On Oct. 7, 2016, the New Jersey legislature approved a bill that would eliminate the New Jersey estate tax by 2018. The bill is the result of a compromise between Gov. Chris Christie and the state legislature to increase the state’s gas tax by 23 cents per gallon and slightly reduce the state sales tax. The bill is expected to be signed by Governor Christie in mid-October. [UPDATE: The governor signed the bill into law on October 14, 2016].
New Jersey currently has one of the most penalizing estate tax regimes in the country, with an exemption of only $675,000 and a top marginal rate of 16 percent. The new legislation would increase the exemption to $2 million on Jan. 1, 2017, and eliminate the tax entirely on Jan. 1, 2018.
On May 10, 2016, Governor Hogan signed the Maryland Fiduciary Access to Digital Assets Act (the “Act”), which will become effective on October 1 of this year. Continue reading “Maryland Enacts Digital Assets Act”
The Wealth Planning Practice Group at Duane Morris began a blog in May 2016.