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An overview of federal estate tax laws

When a person passes away, the contents of their estate will be subject to a wide range of fees and procedures. State laws can determine whether an estate will be subject to estate or inheritance taxes. However, federal law also has a large impact on when estates have to pay federal tax and under what circumstances exemptions occur.

If you are involved in processing an estate on behalf of a loved one or if you are currently planning your own estate, it is important to have a good understanding of the current laws and financial limits regarding federal estate taxes.

What is the gross estate limit for the estate tax?

It is paramount that the gross estate is calculated first followed by deducting exemptions, since this can indicate whether the estate will be subject to estate taxes. After deductions of applicable exemptions, a person’s estate can be exempt from estate tax is it is under the value of $11,400,000 in 2019. This is a significant increase from 2017, when the estate tax limit was $5,490,000.

What are the estate tax exemptions?

The marital deduction is the main form of additional estate tax exemptions. It’s possible for a deceased person’s estate to pass tax-free to a surviving spouse. This can be done only if the spouse is a U.S. citizen. Other possible deductions include administrative expenses and funeral costs. Claims made against the state can also be exempt.

If you have further questions about estate tax exemptions and filing estate tax returns in Florida, you should consider both federal laws and state laws. Florida does not currently collect estate tax or inheritance tax.

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