If a person inherited an IRA (Individual Retirement Account) valued at $70,000 which is part of a trust, and the combined income is around $125,000 what would their tax burden be?tax rate would be 28%. If not cashing it out, then 25% that persons taxable income. >
How could a person minimize or even eliminate any tax burden on their family overseas that is trying to help them with a down payment on a house, while also making the tax burden on themselves minimal. Also what is the most a person could receive without declaring? Would they need a contract?Gifts that a person receives that are under $100k would not be subject to any United States tax; however the family overseas might want to check the gift tax burden in the country of their residence, but they would not owe any U.S. taxes. If the gift is over $100k then a person would have to file an information return and report the gift. But, that person would not owe any tax on it. If the person is receiving it as a loan then they may be required to have formal loan documents with payment and interest terms. Interest that loan could be taxable in the U.S. to the person giving the loan.
What would the tax burden for a college savings plan that was originally $25,000 but by the time we cashed it out it had dropped to $20,496 for a six year old.Since the account lost money then there are no taxes due. And in most cases even if it had not lost money there would be no taxes on the donations made to a six year old because these accounts are first of all a gift, and they are also after tax money that are not taxable to a minor.
Could a senior citizen gift money to their grandchildren to lessen their tax burden and receive a tax deduction for it?In most cases gifts to any specific individual may not be deducted. Only gifts to a qualified charitable organization would be deductible.
Would a person need to pay a portion of last year’s tax burden in order to help my next year’s tax burden?You are required to pay enough tax (either by having your employer withhold it from your pay, or by paying estimated taxes) in the current tax year so that you will not owe a significant amount of tax in the next year when filing your tax return. If you do not pay enough of your tax liability then you could incur a penalty for underpayment of taxes.
Having a tax burden can be a trying time for even the hardiest of individuals. Many questions can come to play when a person is carrying a burden of this nature. Knowing your rights and the tax laws is the key to being prepared for any questions that might arise when dealing with tax burdens. When having questions about tax burden you can contact the many Experts available.