Estate & Gift Tax Update

Now that the federal Unified Estate and Gift Tax has a level of certainty in it, here are the updated figures for 2014.

Estate and Gift Tax Update
Maximum Estate and Gift Tax rate 40%
Inflation adjusted estate exclusion: $5.34 million
Annual Gift Giving Exclusion: $14,000
($28,000 per couple)


Check Portability of an unused estate exclusion to a spouse is possible
Check There is an allowed deduction to account for estate taxes paid to a state
Check Use the annual gift giving exclusion as an estate planning tool for yourself and your heirs

So while you still can’t take it with you, at least the federal government will let your survivors take more of it with them.

Five Ideas for a Better 2014

As you buckle down and try to make plans to accomplish your 2014 resolutions, don’t forget to conduct an annual review of things that impact your paycheck. Here is a checklist of five financial items to review:

Idea 1 Conduct a new withholding calculation. There is nothing worse than a surprise at tax time either with a large tax bill or an overly large refund. Estimating proper withholdings was tough to do in 2013 with all the tax law changes. Now that you know the impact of these new laws, make the necessary adjustments to your 2014 paycheck to account for this new tax reality.
Idea 2 Review your insurance. Every year you are inundated with detailed legal language that updates your insurance policies. They never seem to give you the full policy, just changes to certain sections. The point? The policy you signed up for is no longer the insurance policy you currently have. Go through a review of your insurance needs and determine whether your policies are still meeting those needs. Your insurance agent should be well versed on the recent changes and can help you work through this process.
Idea 3 Conduct a credit check. Identity theft is reaching epidemic levels. The IRS admits paying out a billion in fraudulent refunds, while credit card information is being stolen by the millions from large retailers. Your best defense is to stay vigilant by reviewing your credit reports for any suspicious activity and by reviewing your credit card and bank statements. Remember you are eligible to receive a free credit report from each of the primary credit bureaus each year. Here is the link to request yours:
Idea 4 Review your investments. If you haven’t already done so as part of your year-end tax planning, now is a good time to review and rebalance your investments. Do your investments match your risk tolerance? Do they reflect your age and financial needs? If you need help with this exercise do not hesitate to contact a trusted advisor.
Idea 5 Set up a household budget. With all the companies attempting to annuitize their billing (monthly bills for things like: cell phones, cable, credit reports, insurance, garbage and banking) it is easy for spending to unknowingly get out of hand. By conducting the simple exercise of forecasting your income and anticipated expenses for the year you can avoid surprises. Remember to set savings goals, including goals for major purchases and vacations.

While there are certainly other areas that you should review each year, the ones mentioned here go a long way to ensure your 2014 financial health is in good condition.