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There are three basic components in calculating estate taxes. There is the applicable exclusion, or the threshold at which an estate becomes taxable. There are your deductions, marital, charitable etc... And ... what is left is your taxable estate, for which you can be taxed at rates in excess of 50%. So what is happening with the estate tax? 2) The estate tax rates are slowly decline. The highest rate of 55%, will decline to 45% in 2009. And finally, in 2010, for just one year, the estate tax is completely gone. Of course, this is where the expiration of EGTRRA comes comes in. Without an extension of the 2001 tax act, the estate tax rules go right back to where they were before we started. That is $1Million applicable exclusion and a top rate of 55% on your taxable estate. So should you run out and change your will? Chances are there is something in your will that could be altered to accommodate these new rules. Feel free to contact us...
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In
2001 the EGTRRA Tax act brought sweeping changes to the already complicated
world of Estate Planning - The actual rules, which are summarized
below, have the effect of slowly reducing, and finally eliminating the estate
tax for all but the largest estates. Of course the biggest worry of all
that is that the EGTRRA Tax act of 2001 will expire at the end of 2010 with
another act of congress to extend it.