Those who own property in Connecticut, regardless if they are residents of the state, need to know what taxes will apply to them now or their estate when they pass away. Estate taxes, for example, are no joke and can cost a lot if the proper estate planning protections are not put in place. Here is what people need to understand about estate taxes.
Fact number one: not all estates will be taxed. In Connecticut, for an estate to be taxed, its value has to be over $2.6 million. There is currently a cap on estate taxes, which is set at $20 million. Meaning taxes will only have to be paid for that $20 million and nothing more. The cap will be reduced to $15 million in 2019.
Fact number two: every state has a different estate tax rate. Currently, in Connecticut, the estate tax rate ranges from just over 7 percent to just over 12 percent. The larger one's estate, the higher the tax rate.
Fact number three: tax forms still required on nontaxable estates. If the value of a loved one's estate is below the $2.6 million mark required for taxes, it does not mean tax documents on the estate do not need to be filed. Connecticut requires an estate tax returned be filed on all estates, regardless if it is taxable.
Fact number four: estate taxes must be filed and paid on time. While April is known to be tax season, one should not wait for this time of year to file and pay estate taxes. Estate tax returns must be filed within six months of the date of death. Failure to file and pay on time could result in one having to pay late payment penalties.
Estate taxes are far from a joy to figure out. Connecticut laws regarding this issue are frequently changing so it can be difficult to stay up to date on what is required. Those who need assistance with estate tax issues can turn to an experienced tax attorney who will have all the current information about what the state requires when it comes to filing and paying estate taxes.