Why You Need to Plan Your Estate Now

Plan Your Estate Now ,estate planning, lawrence israeloff cpa tax attorney melville nyEstate planning puts your mind at ease and makes things easier for your loved ones once you are gone. Nobody can predict the future and emergencies can occur at any time, which is why it is important to plan your estate now.

By not taking action now, you allow the government to get first crack at your estate when you die. The government’s goal is to take as much of your assets as possible, and it has no desire to help you or be sympathetic to the loss your loved ones just experienced.

There are several things you can do right now to tie up loose ends in your estate. Begin by compiling an inventory of your assets and creating a will or updating your existing will. Dying without a will can cost your heirs their inheritance and leaves you with no control over how your assets are handled once you are gone.

In addition to or in place of a will, you might want to create a trust. Trusts control how your assets are administered and distributed, eliminate delay of this distribution, and might allow you to reduce your estate taxes. Having a plan in place and discussing the details of the plan with your heirs now can avoid disputes and confusion in the future.

Overcome the Discomfort of End-of-Life Planning

Unfortunately, people often delay estate planning for a variety of reasons. Most healthy people are focused on living their lives, not preparing for their deaths. The idea of growing older or dying unexpectedly does not enter their minds. People struggle to make difficult choices and decisions that could upset family members. The estate planning process can be uncomfortable and unpleasant, but avoiding it makes things in the future even more uncomfortable and unpleasant.

 A few important items to remember as you start the estate planning process:

  •  In addition to a will, you should also designate a power of attorney. This is the person or entity that will make decisions on your behalf if you become incapacitated.
  • You should consider a living will and a healthcare proxy, also known as a medical power of attorney. This eases the burden on your loved ones regarding the difficult decisions they will need to make if a medical emergency arises.
  • Be aware of federal and state laws when making decisions about your estate. An estate planning expert can help you bring everything together and make the best decisions for your circumstances.

Finally, if you already have a will or trust in place, but it’s been awhile since you’ve reviewed it, now is the time. As your life changes, it is important to update and revise your estate plan.

If you have questions about the most recent changes to the tax laws or you need assistance with tax or estate planning, contact an experienced tax professional. Feel free to contact us to answer your questions at 516.537.4440

 

Source: http://money.cnn.com/magazines/moneymag/money101/lesson21/index.htm

http://dailytradealert.com/2014/08/04/why-you-need-to-look-at-your-estate-planning-now/

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New Tax Laws and What They Mean to You

new tax laws, The Law Offices of Lawrence Israeloff, PLLC , Melville, NY 11747

Working with an experienced tax attorney makes it easier dealing with the ever-changing Federal & State tax situation

Every year changes are made to the tax law that affect the way you manage your money throughout the year and how you file your tax return in the new calendar year. As soon as you are comfortable with one aspect of tax law, changes are made and you must relearn everything you knew. Working with an experienced tax attorney makes it easier to deal with an ever-changing situation, but it is also important to have a general understanding of the current laws.

What do you need to know about the most recent changes to tax laws?

Effect of ACA (i.e.; Obamacare) on Your Taxes

The Affordable Care Act requires you to carry a minimum amount of health insurance. If your plan does not meet the requirements, you will be forced to pay a fine, which in 2014 equals 1% of your annual income or $95 for each person you claim as a dependent. Further changes could be enacted in the coming years, but most expect the fine to be higher in 2015. At this point, it is too late to apply for coverage to avoid the 2014 penalty, so speak with your tax attorney to determine the best way to handle the fee.

The ACA also included an additional 3.8% tax on investment income. The tax applies to those making more than $200,000 (or $250,000 as a married couple filing jointly), so try to realize capital gains during years you earn less than those limits. The use of income timing, installment sales, and other tax deferral strategies can be effective in managing this new tax.

Finally, the ACA requires a new 0.9% Medicare health insurance tax on wages for those earning more than $200,000. If you are self-employed, you should plan for this additional tax when calculating your estimated tax payments. If you are an employee, the tax will be added to your Medicare tax in your paycheck.

Energy tax credit

Energy tax credit opportunities have been extended to 2016, so you are still able to get a credit for certain energy efficient upgrades to your home. In most cases, the credit is 30% of the total cost of the product. If you were thinking of putting off utility or other upgrades until after the first of the year, you might want to reconsider so you are eligible to claim the credit on this year’s tax return.

Medical Expenses

In previous years, you were able to deduct medical expenses that surpassed 7.5% of your adjust gross income, but as of 2013, you can deduct them only if they surpass 10%. The 7.5% limit remains the same for those over 65 years of age. Despite the increase in the limitation, it is still important to plan for this opportunity when possible. For instance, paying a medical bill in one lump sum could qualify you for a tax break, whereas staggering the payments could result in a complete loss of tax benefits.

 

If you have questions about the most recent changes to the tax laws or you need assistance with tax planning, contact an experienced tax professional. Feel free to contact us to answer your questions at 516.537.4440

 

Source: http://www.fool.com/investing/general/2014/02/08/new-tax-laws-in-2014-and-how-to-plan-for-them.aspx

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Personal Tax and Financial Planning 2014 – 2015

Personal Tax and Financial Planning 2014 , Israeloff law cpa, Melville NY

Personal Tax and Financial Planning 2014 – 2015: What You Can Do Now to Save Money Now

If you are like most people, you experience an end-of-year rush that leaves you feeling exhausted and frustrated. Tax and financial planning is no different – the change in the calendar and the coming tax season after the New Year loom, and you want to do all you can now to save money. Luckily, there are a few important moves you can squeeze in now to make things a little easier when 2015 tax season arrives.

Remember, as you make decisions, any planning and strategy you employ must apply to both 2014 and 2015. A multi-year outlook ensures anything you do to save taxes this year won’t cost you more in the coming year. Also, be aware of the Alternative Minimum Tax. What works now could increase tax problems in the future. People who have many dependents, deduct state and local tax, exercise incentive stock options, or enjoy large capital gains should expect to pay this alternative tax.

Income and Deductions

Postpone income until 2015 and accelerate deductions into 2014 to lower your 2014 tax bill. This strategy may enable you to claim larger deductions, credits, and other tax breaks for 2014 that are phased out over varying levels of adjusted gross income. These include child tax credits, higher education tax credits, and deductions for student loan interest. Postponing income is also desirable for those taxpayers who anticipate being in a lower tax bracket next year due to changed financial circumstances. Note, however, that in some cases, it may pay to actually accelerate income into 2014. For example, this may be the case where a person’s marginal tax rate is much lower this year than it will be next year or where lower income in 2015 will result in a higher tax credit for an individual who plans to purchase health insurance on a health exchange.

Charitable Giving

The holidays are a time for giving and charitable contributions are no exception. Many people feel generous this time of year, and tax-wise it can pay off. Keep in mind donations charged on a credit card are deductible in the year charged, not when you make your payment. This means you can squeeze in a few donations before the end of this year and not need to make the payment until your bill arrives in January. You can give generously without leaving yourself short on funds for the holiday season.

Make Changes to Your IRA Funds

Converting traditional IRA funds to a Roth IRA can save you money over the long-term if your tax rate this year is lower than it will be in the future. Wiggle room in your current bracket also allows you to absorb a small Roth IRA conversation without forcing you into a higher tax bracket this year.

Also, don’t forget to make a tax deductible contribution to your traditional IRA or 401(k) retirement account if you are eligible.

Update Estate Planning

Recent changes concerning federal and state estate tax could mean it’s time to take a look at your current estate plan, if any, or finally implement an estate plan for the first time. In addition to changes in the law, changes in your personal life might be cause for a review of your estate plan that could lead to saving you money and improving your family’s situation in the future.

Making gifts sheltered by the annual gift tax exclusion before December 31st can save gift and estate taxes. You can give $14,000 in 2014 to each of an unlimited number of individuals but you can’t carry over unused exclusions from one year to the next. The gifts also may save family income taxes where income-earning property is given to family members in lower income tax brackets who are not subject to the kiddie tax.

Taking action now can reduce your tax liability this year and next. Unfortunately, many people get caught up in the hustle and bustle of the holiday season and miss out on this last minute opportunity to save money. Waiting reduces your options and could be a big financial mistake. To make the most of your circumstances and take advantage of end of year savings, contact a financial planning and tax expert for more information. Feel free to call us to discuss your situation.

Source: http://themoneygeek.com/2014/11/09/2014-year-end-tax-planning-tips/

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What is a “Trust” and Who Needs One?

What is a “Trust” and Who Needs One? es Of Lawrence Israeloff, PLLCEstate planners are often asked whether trusts are only for the wealthy. Though it is not necessary for some people of modest means to establish a trust, it can be a useful estate planning tool, even if you are not rich.

Trusts establish a legal relationship whereby property is held by one party for the benefit of another. Trusts offer peace of mind that your assets will be dispersed according to your wishes once you are gone. Like a will, trusts can be used for any type of property and allow flexibility in the distribution of this property.

When you create a trust, you transfer ownership of some or all of your property to the trustee, who holds that property for the trust’s beneficiaries. For instance, if you want to place real estate in a trust, you would have that property titled in the name of the trustee. Trustees can be family members, friends, a trust company, a law firm, or a specific attorney or advisor.

Who Needs a Trust?

Anyone can avoid court administered probate upon death with use of a trust, but you should carefully consider if the expense connected with forming a trust is worth the investment. You should consider a trust if you have:

• Privacy or probate concerns
• Substantial real estate assets
• Large life insurance policies
• Specific instructions for how your estate is to be distributed once you are gone
• Desire to minimize estate taxes
• Need to protect your estate from creditors or lawsuits

If your accounts are held in joint tenancy or you have named beneficiaries for specific accounts or property, a trust might not be necessary. These assets automatically become the property of the beneficiaries upon your death without probate. For instance, if you own a home jointly with your spouse and both of your names are on the deed, your spouse will automatically become the full owner once you are gone.

An attorney can help you determine if a trust is the best option for you and your family.

What are the Benefits of a Trust?

The primary benefit of using a trust is to provide direction for managing your assets if you become incapacitated and upon your death.

A trust offers a great deal of flexibility. It can be revocable, which means you can make changes to any part of it or terminate it until the moment you are no longer capable of making decisions or communicating.

A trust also ensures your beneficiaries avoid dealing with probate at your death, thus saving time and money. Probate is the court process by which your will is proved valid, and through which your estate is administered after your death.

Finally, trusts are private, so the value and contents of the trust do not become a matter of public record once you die.

Have questions about your personal need for a trust? Then just call us to discuss your situation.

Source: http://money.cnn.com/retirement/guide/estateplanning_trusts.moneymag/index4.htm

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Excited About Taxes? We Are Too!!

 

 

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Life And Taxes

First blog post coming soon.

“‘Cause I’m the Taxman,

Yeah, I’m the Taxman.”

-George Harrison

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