In America, there are 38 states that don’t require their residents to file an estate tax, and Iowa is one of them. However, the citizens of Iowa may still need to pay for their estate tax return in Des Moines, IA if they have several assets. The estate tax is sometimes mistaken as an inheritance tax, but they do have a few differences.
Aside from estate taxes, the state of Iowa also doesn’t have a gift tax. However, if you exceeded the gift tax exemption amount, this is where you’ll have to file the gift with the IRS.
What is an Estate Tax?
When a person with a lot of assets dies, their properties and money will be handled by an administrator or executor. If the deceased person has left unpaid debts and taxes, the executor or administrator will pay them with the deceased person’s assets before distributing what’s left to those who are entitled to them.
What is a Gift Tax?
In 2022, the federal gift tax has increased the gift exemption from $15,000 to $16,000 per year. There’s also what we call the Lifetime Gift Tax Exemption. This exemption is set by the government of how much money or assets you’re allowed to give throughout your lifetime. The lifetime gift tax exemption is set at $12.06 million.
However, take note that even if you’re not close to exceeding the lifetime exemption, exceeding the annual gift tax exemption will require you to file for gift tax returns in Des Moines, IA.
All necessary documents for the filing of gift and estate tax returns can’t be handled alone by the executor. Documents may include forms 706 for Estate Tax Returns, 1041 for Income Tax Returns for a Trust or Estate, and 709 for Gift Tax Returns. We at Tax Problem Solvers of Iowa can prepare all the needed documents with the help of our probate attorneys.
What to Do?
We work with probate attorneys hand-in-hand to ensure your trust or estate is accounted for accurately, while also making sure that all taxes are paid properly. This way, all our clients won’t have to deal with the stress and hassle of handling estate and gift tax returns in Des Moines, IA.
If you are the Executor or Trustee of a Trust or Estate, let us help you keep the IRS satisfied and make sure you avoid overspending. Estate and gift tax returns are highly complicated and rigorously reviewed by the IRS. Therefore, we recommend that you work with a licensed and experienced Certified Public Accountant (CPA) who’s familiar with Estate tax.
If a decedent’s estate is large, the estate could potentially owe the Federal government what is called Estate tax and have to file a Form 706, Estate Tax Return.
We can prepare these for the executor, as well as the 1041 Income tax returns for a Trust or Estate, and 709 Gift tax returns.
We work hand-in-hand with Probate attorneys to ensure your trust or estate is accounted for accurately, and the tax paid properly, so the client doesn’t have to deal with that hassle and stress!
If you are the Trustee or Executor of a Trust or Estate, let us help you keep the IRS satisfied and make sure that you don’t have to pay any more than you have to.
Estate tax returns are highly complicated, and rigorously reviewed by the IRS. We cannot recommend having such returns prepared by anyone other than a properly licensed and experienced Certified Public Accountant familiar with Estate tax.