Estate taxes can be a complicated subject. There are many rules and exceptions. Some situations may even change the rules. Understanding estate taxes can help you to better prepare for leaving your heirs your business when you die, though, so it is well worth your time to look into how to minimize those tax burdens your heirs may face. We will cover that, along with a note about how to obtain EIN.
Estate taxes are applied to all the assets you owned upon your death. They can take a large chunk of your assets value. They are assessed at the federal, state and local levels. Federal estate taxes will affect you if you have a lot of assets, such as a business. The current threshold for these taxes as of 2018 is $11,180,000. So, if you assets are below that, you don’t have to worry.
Not all trusts will protect your heirs from being hit with estate taxes. The main rule is that to avoid taxation, the trust must be irrevocable. There are many options you can use when applying for a trust. Consider the following:
Do note the information above is for federal taxes, state and local tax laws may differ. In addition, if you get a trust for business reasons, it can help to apply for EIN. This is a unique identifier that will be needed to file taxes. You can do your tax ID application through the IRS. There are also services that can help you with your EIN number application and make the process easier.