Are You Helping Your Clients Prepare for Fiduciary Income Tax?

Since opening our firm in 1997, we have made an enduring commitment to education and excellence. This meant investing in training and staying up-to-date with our documents and technology. We have also worked to provide education to our community about protecting wealth and new developments in estate planning. This commitment has served our clients well as they prepared for life events that were both anticipated as well as unplanned.

In 2012 the American Taxpayer Relief Act (ATRA) was passed. This act effectively repealed the federal estate tax for the vast majority of Americans; the exemption was raised to $5 million per individual. But this was not the end of our federal tax planning efforts.

When beneficiaries earn income that accumulates within a trust or estate, that income can become subject to the fiduciary income tax.

Compare that to an individual’s income tax rate that would not reach that level until they earned over $415,000, or $467,000 for a married taxpayer that files jointly.

It is important as a client is choosing beneficiaries, to consider their specific circumstance and benefits and earnings they have outside of an estate or trust, and consider how this fiduciary income tax may effect each person. There are ways to plan for each contingency that will give each beneficiary the best possible tax scenario available. But all of this needs to be considered as the estate plan is being created.

Our commitment to training, advanced strategy know-how, and use of technology has assisted many families and businesses in the navigation of this maze of taxes. To complement our efforts, we partner with skilled professionals like you. Please contact me with any questions concerning the fiduciary income tax and how it affects your clients’ goals. We also offer free workshops in our office twice a month. These workshops are designed to answer the most frequently asked questions about estate planning as well as provide the attendee with planning options they may not have previously considered.