14 THE QUEENS COURIER • APRIL 20, 2017 FOR BREAKING NEWS VISIT WWW.QNS.COM Call Now & End Your Tax Nightmare! �������������������������������������� �������������������������������������� �������������������������������� �������������������������������������������������� ������������������������������������������ Co-Author of the best selling book “Breaking the Tax Code” �������������������������������� �������������������������������� Salvatore P. Candela, EA, ATA, ABA Enrolled Agent - Tax Advisor ���������������������������������������������������������������� ������������������������������������������������������ TAX TIPS More States Give Heirs a Tax Break BY JOHN SAVIGNANO If you’re concerned that state taxes will erode your children’s inheritance, you may have one less thing to worry about this year. In an eff ort to dissuade wealthy retirees from decamping, six states have increased the amount of assets that are exempt from estate taxes, reducing or eliminating the amount that heirs will have to pay. Tennessee repealed its death tax entirely. Federal estate taxes are no longer a problem, at least for all but the uber-wealthy. In 2016, up to $5.45 million is exempt from federal estate taxes-double that for married couples. But 14 states and the District of Columbia impose their own estate tax, levied on the estate before it’s distributed; four states have only an inheritance tax, paid by the benefi ciaries. Maryland and New Jersey collect both taxes. In New Jersey, estates valued at more than $675,000 are subject to state estate taxes; Oregon and Massachusetts tax estates valued at more than $1 million. Th ose states are becoming the exception, though. Maine lawmakers voted last year to follow the example of Delaware and Hawaii and peg the state’s exemption to the federal level. Th e law took eff ect January 1. New York’s estate-tax exemption will rise to $4,187,500 from $3,125,000 on April 1 and gradually increase until 2019, when it will match the federal threshold. Off shore Tax Evasion Battling off shore tax evasion is a key priority for authorities both in the United States and abroad. A mountain of cash is parked in overseas banking hubs. And the “Panama Papers” leak brought to the forefront how the wealthy can use anonymous shell companies to hide assets from governments around the globe. IRS’s amnesty program for disclosing foreign accounts is paying dividends. Nearly 55,000 people have come in to IRS to voluntarily fess up about their previously unreported accounts. And that data is generating leads as IRS and Justice seek court orders to acquire the names of other account owners at banks used by amnesty seekers. Th e agencies will continue to expand the geographic scope of their probes beyond Swiss banks. Th ey are looking at fi nancial institutions in the Caribbean, the South Pacifi c, Hong Kong, India, Israel, Luxembourg, Panama and other locales. IRS has another weapon in its arsenal for sniffi ng out off shore accounts. Now that foreign bank reporting of U.S. owned accounts has kicked in. Under the Foreign Account Tax Compliance Act, which was enacted in 2010, foreign banks and other foreign fi nancial institutions must annually report to IRS on accounts of over $50,000 that are owned by U.S. persons. Th ose that fail to do so face a 30% withholding tax on certain U.S. source payments made to them. To enforce FATCA, the Service has entered into disclosure pacts with many countries, whereby the foreign fi nancial institutions disclose data on U.S. account owners to their own governments, which will then provide the information to the IRS. Aft er years of delay, this new reporting regime is expected to soon be in full swing. John Savignano is a partner with Savignano Accountants & Advisors located at 47-46 Vernon Blvd., Second Floor, in Long Island City. For questions, dial 718-707-0955.
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