As an accountant just so you know your tax rate when you bump up a bracket is only on the amount in that new bracket. So for example if you were bumped into a higher bracket by $100 you are only paying the higher tax on that $100, all the wages below that bracket are still taxed the same.
Yep. I’ve tried to explain that to people and it’s a hard concept to grasp. I have graduate degrees in accounting and finance.
Trust proceeds can be taxed depending on the type of trust. Doesn't matter how it's funded. or how much There are
Hmm, generally trusts are set up as RLTs until the dad/mom both die, then they become ILTs. If the insurance payments go into an ILT, as is the norm, it's my understanding that they're not taxed up to 11.7 million. I said 11.1 million earlier, that's wrong.
Sounds like you got it covered, I couldn’t tell by reading it if you thought all the wages were taxed higher when you cross a new bracket. Try to help people out when I can
Actually went back and looked it up. You are correct (thank you for your persistance.) There are two way life insurance proceeds may be taxed. Estate tax (currently over 11 million as you cited.) And if the policy had a cash value in which cash had been taken out above and beyond the cost basis. So assumming one had a variable universal life policy, universal life or whole life policy and had paid 10,000 into it and withdrew 15,000 (the cash value grew beyond the original premiums.) The beneficiary would end up with a 1099.
No problem! You gave me a little scare there. I thought I might have missed something.
Yeah, she should have caught it. The IRS may not help at all. They're often not helpful if it's not just a textbook problem you can answer off the website. And I still think the 1099 was mis-issued. It should have been a MISC, not an INT.
