Preservation | Family Wealth Protection & Planning

The Tax Cuts and Jobs Act of 2017 brought a myriad of changes to the tax law, including for individual taxpayers. While certain deductions that were available to individuals have now been limited — e.g., the $10,000 limit on the state and local income tax (SALT) deduction — the standard deduction has increased to $24,000 for a married couple filing jointly and $12,000 for single filers. In 2017, the standard deduction was $12,700 for a married couple filing jointly and $6,350 for single filers.

The Internal Revenue Service has released the Applicable Federal Rates (AFRs) for December 2018. AFRs are published monthly and represent the minimum interest rates that should be charged for family loans to avoid tax complications.

Here are the rates for December 2018:

The IRS announced cost-of-living increases for various retirement-related accounts on Nov.1, 2018. These changes for 2019 include:

• The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,500 to $19,000.
• The limit on annual contributions to an IRA is increased from $5,500 to $6,000. The additional “catch-up” contributions limit for individuals age 50 and over remains at $1,000.

The Internal Revenue Service has released the Applicable Federal Rates (AFRs) for November 2018. AFRs are published monthly and represent the minimum interest rates that should be charged for family loans to avoid tax complications.

Here are the rates for November 2018:

Thomson Reuters recently published its estimated figures for 2019 for estate and trust income tax brackets, as well as the exemption amounts for estate, gift and generation-skipping transfer (GST) taxes. These figures are adjusted annually for cost-of-living increases.

Pursuant to the Tax Cuts and Jobs Act, the measure of inflation has changed for these figures. Thomson Reuters warns that because of errors and ambiguities in the act, the estimates were made based upon what Thomson Reuters staff believed to be consistent with congressional intent.

The Internal Revenue Service has released the Applicable Federal Rates (AFRs) for October 2018. AFRs are published monthly and represent the minimum interest rates that should be charged for family loans to avoid tax complications.

Here are the rates for October 2018:

Traditionally, due to lower estate tax exemption amounts, many married couples would use bypass trusts or credit shelter trusts as part of a typical estate plan. For example, on the death of the first spouse, assets in that spouse’s revocable trust would be allocated to a bypass trust (frequently referred to in the trust document as a family trust) up to the amount of the deceased spouse’s remaining estate tax exemption, with the balance allocated to a marital trust for the surviving spouse. The bypass trust would not only pass estate tax free at the first spouse’s death, but would also be outside of (i.e., bypass) the surviving spouse’s taxable estate at death. In addition, the bypass trust assets might continue from generation to generation without being subject to any additional “transfer taxes” like the generation-skipping transfer (GST) tax, if GST exemption was allocated to the trust. This type of planning continues to provide a variety of benefits.

The Internal Revenue Service has released the Applicable Federal Rates (AFRs) for September 2018. AFRs are published monthly and represent the minimum interest rates that should be charged for family loans to avoid tax complications.

Here are the rates for September 2018:

The Internal Revenue Service has released the Applicable Federal Rates (AFRs) for August 2018. AFRs are published monthly and represent the minimum interest rates that should be charged for family loans to avoid tax complications.

Here are the rates for August 2018:

The Internal Revenue Service has released the Applicable Federal Rates (AFRs) for July 2018. AFRs are published monthly and represent the minimum interest rates that should be charged for family loans to avoid tax complications.

Here are the rates for July 2018, which show overall increases over the June 2018 rates: