When a person passes away, the assets left for his or her family is generally subject to the estate tax. However, there are certain breaks that can help these people reduce this tax bill.
According to Forbes, the Internal Revenue Service recently announced it is extending the time to take advantage of a key estate tax break made available for married couples. The extensions give widows and widowers more time to carry over the estate tax exemption of their spouse who died and add it to their own. Married couples are able to transfer $5.34 million each without taxes.
In order for this break to be taken advantage of, tax law outlines that the executor of the estate needs to file a tax return within nine months of the death, even if there is no tax due on the estate.
Estate taxes have been making waves recently, as a few states are looking to provide some sort of relief. According to The Washington Post, leaders of the Maryland General Assembly recently outlined plans to reduce the estate tax, as well as offer tax credits to help benefit businesses around colleges and universities.
One of the biggest motivators for states to provide relief is to keep retirees from moving somewhere that has less harsh tax laws. This is especially important with many state economies still struggling to fully recover from the recession.
“As we come out of the worst economic recession since the Great Depression, we need to rebuild our private sector confidence to invest and expand in Maryland’s economy,” House Speaker Michael Busch said at a news conference.