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According to the College Board the average tuition for a 4 year private education is $39,518 per year. The average cost of a 4 year in- state public education is $17,860. Either way, it’s a lot of money.
Under current federal estate tax law there is an exclusion up to $5.12 million in 2012. Taxable estates above this amount are taxed at 35%. This exclusion is scheduled to decrease to $1 million beginning in 2013. The tax rate will also increase to 55%. This exclusion can be used either at death or during life. In other words, the federal estate tax and the federal gift tax are unified.
Have you made a loan to a child or grandchild?
When making a loan, you have an expectation of getting paid back. When a family loan turns into a grant, you’re not going to get paid back. Here are 3 reasons a family loan may turn into a grant.
Here are 3 Easy Ways to help them:
1) Make a Loan
Parents and grandparents can loan to their child or grandchild. If this is the approach taken, a formal loan agreement should be drawn up. This should include interest and the repayment terms. The Internal Revenue Service ("IRS") will require a minimum amount of interest to be … Continue reading »
Half of the year is almost over. Don’t wait until the end of the year to do your planning. It’s time for your Mid-Year Tax Review. 1) Review your withholding. Review your prior year income tax return for the income tax paid. Check your year-to-date paystub to see if your withholding is tracking where it needs to be. If you need to adjust your federal withholding, file … Continue reading »