Shoffner & Associates

Hot Topics in the Law and in the News.

Thursday, April 28, 2011

Is It Time For A New Estate Plan?

Can you think of a better thing to do on a lovely spring day than review your estate plan?  No, I’m not kidding.

Now it is especially important to review your plan because the way Wills are probated in Massachusetts is about to change. 

As of July 1, 2011 the Uniform Probate Code will be the law in Massachusetts. 
While the changes will make the probate process faster, it also changes some long-standing rules of inheritance.  Now is the time to call us to make sure that your plan will do what you want it to do.
This is just a peek at some of the key features of the new Code. To learn how the new Code affects you, just give us a call and we’ll set up an appointment.

The Informal Probate Option

After July 1, 2011 the informal probate option will shorten the time it takes to start the probate process. As long as all the parties agree, a personal representative can be appointed in a matter of weeks – not months. There are fewer documents to file, which gives the family more privacy. 

A good estate plan can save you – and your family – thousands of dollars. Call us to find out how.

If You Don’t Have A Will Your Spouse Can Inherit It All

The way it is now, if you die and don’t have a will, but you do have a spouse and children, your spouse inherits half of your estate and your children get the other half.  That can cause quite a few problems.

Under the new Code your spouse will inherit your entire estate as long as your spouse is your children’s other parent.

The best way to make sure that your loved ones receive what you want them to have is to have a well-drafted estate plan.  We can help.

If You Get Married Your Old Will Is Still Effective

Under the current law, your marriage usually makes your old Will invalid. The new Code changes that. Marriage no longer revokes a prior will.
Your new spouse will take a share of any part of your estate that you don’t devise to the children you had before the marriage.  If you don’t have any children from a prior relationship, then your surviving spouse will inherit a share of your entire estate.
If you have been married more than once, or you have children from a prior relationship, call us and we’ll help you make sure that your Will works the way you want it to work.

If You Have Grandchildren Their Shares Might Change

Today, if one or more of your children predeceases you, your grandchildren will share the portion of your estate that the predeceased parent would have received (unless your Will says otherwise).

Under the new Code, your surviving children each receive the share that your Will provides for them, and your grandchildren who have deceased parents divide the shares of the deceased parents equally.

That’s another reason why it’s important to make a plan that works for you and your loved ones under the new Code.

Estate planning doesn't have to be hard, and it doesn't have to be expensive.  The right estate plan will help you family take full advantage of the new Probate Code when the time comes. 

At Shoffner & Associates, we know what to do and how to do it right. As always, we are ready, willing, and able to help you.  We’ll design a plan that is right for you and your budget.  Call us today at 617-369-0111 or send us an email. We’re ready to make it easy.

Monday, February 28, 2011

Help For Struggling Taxpayers

One of the biggest obstacles for small businesses is dealing with the nearly crushing burden of federal taxes.  Often, the business owner ends up filing tax returns late, paying tax obligations late, and incurring terrifying penalties.  In an effort to reduce the burden of late payments for individuals and small businesses, the IRS has taken some new steps to help taxpayers get a fresh start.  These include:
  • Significantly increasing the dollar threshold when liens are generally issued, resulting in fewer tax liens.
  • Making it easier for taxpayers to obtain lien withdrawals after paying a tax bill.
  • Withdrawing liens in most cases where a taxpayer enters into a Direct Debit Installment Agreement.
  • Creating easier access to Installment Agreements for more struggling small businesses.
  • Expanding a streamlined Offer in Compromise program to cover more taxpayers.
Freya Allen Shoffner and the attorneys at Shoffner & Associates are ready and willing to help your business deal with the IRS so that you can focus on success.  Call us at 617-369-0111, or send us an email.  Anytime.

Wednesday, February 16, 2011

Don't Forget The Self-Employed Health Insurance Deduction!

IRS Tax Tip 2011-31

Health Insurance Deduction Reduces Self Employment Tax  In 2010, eligible self-employed individuals can use the self-employed health insurance deduction to reduce their social security self-employment tax liability in addition to their income tax liability. As in the past, eligible taxpayers claim this deduction on Form 1040 Line 29. But in 2010, eligible taxpayers can also enter this amount on Schedule SE Line 3, thus reducing net earnings from self-employment subject to the 15.3 percent social security self-employment tax.

Premiums paid for health insurance covering the taxpayer, spouse and dependents generally qualify for this deduction. Premiums paid for coverage of an adult child under age 27 at the end of the year, for the time period beginning on or after March 30, 2010, also qualify for this deduction, even if the child is not the taxpayer’s dependent.

As before, the insurance plan must be set up under the taxpayer’s business, and the taxpayer cannot be eligible to participate in an employer-sponsored health plan. Details, including a worksheet, are in the instructions to Form 1040.

Friday, January 21, 2011

Small Non-Profits May Have Simpler IRS Filing Requirements

That's right. For tax years beginning on or after Jan. 1, 2010, most tax-exempt organizations whose gross annual receipts are normally $50,000 or less can file the e-Postcard. The threshold was previously set at $25,000 or less.Check our the IRS Website for more information.  And, feel free to call or email Freya Shoffner at Shoffner & Associates -- 617-369-0111-- if you have any questions. 

Monday, January 10, 2011

Good News From The IRS?

Actually, the “Tax Relief, Unemployment Insurance Authorization, and Job Creation Act of 2010” does provide some good news.

First, while many had expected income tax rates to rise this year, the six federal income tax rates will remain at the same levels and itemized deductions will continued to be allowed in full.

Second, the social security tax rate was lowered for all wage earners from 6.2% to 4.2% for 2011.    This decreased rate replaces the Making Work Pay credit, but we’ll have to wait and see what this tax rate is for 2012.

Third, the 2010 Small Business Jobs Act increased the amount a business can write off for an asset valued between $250,000 to $500,000 that was purchased during the year from for 2010 and 2011.  This write-off applies as long as the total assets purchased do not exceed $2 million.

Fourth, the 2010 Tax Relief Act increased the bonus depreciation (for new assets only) to 100% if purchased between Sept. 8, 2010 and Jan. 1, 2012.

Best Of All, the District of Columbia’s new holiday – Emancipation Day – falls on April 15, 2011.  That means that the tax processing deadline for your 2010 return is April 18, 2011 – so you have three extra days to prepare and file your return.

Ask Shoffner & Associates, The attorneys at Shoffner & Associates are always ready to help you with your small business questions.  Feel free to give us a call at 617-369-0111, or email Freya Allen Shoffner – any time.

Friday, January 7, 2011

Estate Tax. Is There Is? Or Is There Ain’t?

There Is.  At Least For Now.

Seemingly on Christmas Eve, the President signed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (short title: 2010 Tax Relief Act ) which effectively extends the Bush-era tax rates for another two years. The law also provides  new gift, estate, and generation-skipping taxes for this year and next year. Since they are only temporary, Congress will have to deal with the entire situation again in 2012.

Here are the key estate and gift tax provisions of The Act:
  • Beginning January 1, 2011, the estate, gift and generation-skipping tax exemption is $5 million per taxpayer ($10 million per couple) and the tax rate is 35% (beginning in 2010).
  • Heirs will receive a step-up in basis of up to fair market value at the date of death.
  • The estate tax exemption for a deceased spouse is portable.  That means that a surviving spouse can use the unused estate tax exemption of the “last deceased spouse.”
  • The lifetime gift tax exemption increases from $1 million to $5 million, which means that the gift tax exemption is unified with the estate tax exemption.
  • Two year GRATs are still permitted.
  • For decedents dying in 2010, executors can apply the 2011 tax rates or choose to use 2010’s carry-over basis approach. The due date for the estate tax return and/or the return reporting carry-over basis is now nine months following date of the enactment of the Act (September 17, 2011), and not nine months from the date of death.
  • The rates and exemptions are temporary and apply only in 2011 and 2012, at which time the law will need to be revisited again.
  • The 15% tax on qualified gains and dividends will remain in place.  Those in the 10-15% tax brackets will have a no capital gains tax on gains or dividends.

Now What?

Don’t delay.  Review your estate plan with your attorney and make the changes necessary so that your plan will work today, tomorrow, or next year.  As always, Freya Allen Shoffner and the attorneys at Shoffner & Associates are ready to help.