who does mass estate tax accountant or attorney

by Laney Maggio Published 2 years ago Updated 1 year ago 6 min read

How can I reduce my Massachusetts estate taxes?

Here are some ways to reduce or avoid the Massachusetts estate tax:

Credit Shelter Trusts. A surviving spouse receives an unlimited marital deduction, so there are no estate taxes on jointly-held assets when the first spouse passes away. ...
Spend your money. ...
Gifting during your lifetime.

Feb 10, 2021

Who must file a Massachusetts estate tax return?

For every estate of a decedent that died on or after January 1, 2003, a Massachusetts Estate Tax Return (Form M-706) must be filed if the decedent's estate exceeds a particular threshold amount. Since 2006, the filing threshold has been $1 million.

How does the MA estate tax work?

The Massachusetts estate tax exemption is $1 million. This means that if your estate is worth more than $1 million when you die, money will be owed to the state before it's disbursed to your heirs. However, if it's smaller than $1 million, then no state estate taxes will be owed.Dec 30, 2021

Do you pay taxes on inheritance in Massachusetts?

Inheritance Tax in Massachusetts

Massachusetts does not impose an inheritance tax. There is a state estate tax in Massachusetts, however. Estates valued at over $1 million must pay an estate tax.Apr 3, 2020

Do beneficiaries pay taxes on estate distributions?

While beneficiaries don't owe income tax on money they inherit, if their inheritance includes an individual retirement account (IRA) they will have to take distributions from it over a certain period and, if it is a traditional IRA rather than a Roth, pay income tax on that money.

Who files an estate tax return?

The Executor or Administrator of an Estate may be required to file three separate returns: an individual tax return for the decedent, estate income tax return and estate tax return.

What is the Massachusetts estate tax exemption for 2020?

$11.58 million per decedent

The estate tax exemption for 2020 is $11.58 million per decedent, up from $11.4 million in 2019. Estates valued above the threshold may be taxed on a graduated scale of up to 40 percent.Jan 28, 2020

Is inheritance tax based on gross or net estate?

It is the value of the 'gross' estate that is important for calculating inheritance tax payable. The gross estate can include the value of gifts made and income received from trusts during the lifetime of the deceased, if those gifts or that income would be chargeable to inheritance tax.

Does a surviving spouse have to pay Massachusetts estate tax?

Married Couples and Estate Tax

A married couple in Massachusetts can leave any amount to their spouse without needing to pay estate tax. Doing so only postpones the estate tax, however.Sep 10, 2020

What is difference between estate tax and inheritance tax?

Inheritance tax is a levy on assets inherited from a deceased person. Unlike the estate tax, which is levied on the value of an estate and is paid by it, an inheritance tax is levied on the value of the inheritance received by the beneficiary, and it is the beneficiary who pays it.

Are houses included in inheritance tax?

Passing on a home

You can pass a home to your husband, wife or civil partner when you die. There's no Inheritance Tax to pay if you do this. If you leave the home to another person in your will, it counts towards the value of the estate.

What happens to bank account when someone dies without a will in Massachusetts?

"If you die without a will in Massachusetts, your assets will go to your closest relatives under state 'intestate succession' laws.Apr 11, 2022

Is there estate tax in Massachusetts?

The Massachusetts tax is different from the federal estate tax, which is imposed only on estates worth more than $11.7 million (for deaths in 2021). So even if your estate isn't large enough to owe federal estate tax, it could very well still owe Massachusetts estate tax. But it's not just state residents who might owe Massachusetts estate tax.

Does a revocable trust avoid probate?

For example, the property you hold in a revocable living trust avoids probate, but it does not avoid estate taxes, and is counted in your gross estate. Portability. The federal estate tax regime allows a surviving spouse to use the deceased spouse's unused portion of the exemption—a feature called "portability.".

How long after death is a tax return due?

If a return is required, it's due nine months after the date of death. As of 2016, if the executor pays at least 80% of the estate tax due before the deadline, there will be an automatic 6-month extension to file the return.

What is business interest?

Your business interests (sole proprietorship, limited liability company, or closely held corporation) Any property you hold in a revocable living trust. Co-owned property. If you own assets with someone else, generally only your share will be included in your estate.

What can an accountant do for a deceased person?

An accountant can manage the deceased’s accounts while the estate is being closed, pay bills, oversee selling of any goods, deposit any refunds or over payments, etc. Having a professional in this role can help prevent any concerns among heirs that one is spending money improperly or not managing checking ...

What is inheritance tax?

An inheritance tax is a tax charged in certain states on money or property received from the estate of a deceased person. The beneficiary of the money or property must pay any due inheritance taxes individually. As of the 2014 tax year, eight states impose this tax. The eight states are Indiana, Iowa, Kentucky, Maryland, Nebraska, New Jersey, ...

Disclosure of tax return information

To protect the confidentiality of tax records, Massachusetts law generally allows DOR to disclose tax return information only to taxpayers or their authorized representatives.

Power of Attorney, Form M-2848

With a Form M-2848, a taxpayer can show the terms of the POA’s representation and can name one or more representatives. Please note that Form M-2848 does not allow access to a taxpayer’s accounts on MassTaxConnect. See below regarding Third-Party Authorization through MassTaxConnect.

Filing a dispute

For taxpayer and practitioner convenience, a limited Power of Attorney is incorporated into Form ABT, Application for Abatement. This POA is only good for the tax periods specified and the issues covered in the particular dispute.

Paid tax preparer authorization on tax return

You can authorize a preparer to discuss your income tax return with DOR by filing in the oval below the preparer's signature.

Third-party authorization through MassTaxConnect

Taxpayers or their authorized representatives (called a third party) can make tax payments, view copies of notices sent by DOR, send secure messages to DOR and file disputes online through MassTaxConnect . Most business tax returns can also be filed through MassTaxConnect.

How many times can you be an executor of an estate?

You will, most likely, only be an executor or personal representative of an estate once or twice in your life. It may seem overwhelming to understand what tax filings are needed and how all this impact the heirs.

What is Bulger CPA?

At Bulger CPA, we’re collaborative and enjoy partnering with attorneys to help their clients file estate tax returns with confidence. We’re experienced in estate tax law, but don’t have to cover the overhead costs of a large company. Instead, we offer the flexibility and personal attention you can often only find at a small firm.

What is a 706?

These assets include bank accounts, stocks, real estate, IRAs, pensions, annuities and the like. This is called Form 706 - Estate Tax Return . Some estates may also need to file a tax return that reports the income earned from the date of death to the date assets are distributed to the heirs.