Estate taxes, what you need to know

On Behalf of | Oct 25, 2019 | Estate Taxes

Getting through the probate process when a loved one passes away is challenging enough without having to figure out how much one has to pay Uncle Sam because of that individual’s death. It may not seem right, but estate taxes must be paid to the federal government, as well as to the state of Connecticut, if an estate’s value reaches a certain point. What is that point? What happens if one messes up the tax filing or fails to file on time?

An estate tax is assessed on the fair market value of an estate for anything above the exclusion limit. According to the current laws in place, estates that value over $11.4 million are subject to federal estate taxes. The state threshold is much lower, coming in at $3.6 million.

If a tax filing error occurs, the Internal Revenue Service and the Department of Revenue are not going to be shy about making the issue known. An audit inquiry may be opened and, subject to the findings in one’s case, the filing may need to be amended, and further taxes, interest and penalties may need to be paid. If one fails to file on time, interest, penalties and fines may be imposed.

Estate taxes can be a bit challenging to figure out. The filing is not the same as a typical income tax filing. With the assistance of counsel, those who need to file estate taxes with the state of Connecticut and/or the federal government can do so in a timely manner and free from error. If one has found him- or herself being audited over an already submitted filing, this too is something with which a tax attorney can assist.