The estate tax is often misunderstood. When a person dies, the estate potentially can face both federal and state estate tax. This is in addition to any income tax the decedent taxpayer owed and if their estate generates income during the time of probate, say from rental or interest income.
Pennsylvania Inheritance Tax
There are significant exemptions for the federal estate tax, which often changes. Pennsylvania does not have an estate tax. Instead, Pennsylvania levies an inheritance tax. Unlike the federal estate tax, it is not charged against the entire estate; beneficiaries receive exemptions and the percentage of tax depends on which of the four classes of taxation that the beneficiaries belong.
I Can Help You Deal With This Complexity
I understand that this sounds complex. But I can help. I’m John A. Cochran, and I’m an experienced tax lawyer and a CPA. I can assist you with these complex tax issues, both from a planning perspective, setting up accounts or trusts that can reduce the likelihood of owing any federal estate tax or Pennsylvania inheritance tax and, if you are involved in an estate administration, I can assist with calculating the estate’s various tax liabilities and ensuring all work on the filings is accurate and timely.
Deadlines Are Short
There are short time deadlines for filing an inheritance tax return, and there is a discount for early filing. Unfortunately, interest is charged for late filings. If you are an out-of-state resident and own real estate or tangible personal property, you may also be subject to this tax.
You should also keep in mind that the federal estate tax applies if your estate exceeds the current exemption level. Politicians have proposed elimination of the federal estate tax altogether, but politicians often change their mind.
With all of the complexity of this tax, you may be uncertain and confused as to whether you owe tax or may need to plan in advance to minimize any of these taxes. I can help you with all of these questions and provide peace of mind with planning and filing.
Contact My Office
To schedule a consultation with an experienced attorney who can help you with your federal estate tax or Pennsylvania inheritance tax, call John A. Cochran, Esquire, in Greensburg at 724-216-5180 or use my online form.