Under federal and Illinois law, just like individuals are required to pay income taxes, there are taxes that your estate may be required to pay. When you pass away your executor is responsible for making sure that taxes on any income that your estate earns is paid. This is an estate income tax. In addition, your estate may also be required to pay a one-time estate tax based on the value of your estate at the time of your death. If you are concerned about the taxes that your estate may owe after you pass away, contact an experienced Chicago estate tax attorney who will explain the tax requirements of both the federal government and the state of Illinois.Illinois Estate Tax Rules
Illinois has its own estate tax. Under Illinois law only estates that have a gross value of more than $4 million are required to pay estate tax. However, this amount is subject to change. The Illinois estate tax applies not only to the estates of individuals who are Illinois residents, but also to the estates of individuals who have real estate or tangible personal property in Illinois.
Property that is used to determine whether or not an estate will owe estate taxes includes all of your assets or assets in which you have an interest, such as your bank accounts and other financial accounts, real estate, retirement accounts, and personal property. It does not matter whether or not the property is subject to probate. Thus, if you moved property into a trust, even though that property is not subject to probate, it may still be considered part of your estate for purposes of estate tax purposes. Property can be deducted from the value of your estate includes money used to pay the decedent’s funeral expenses, debts of the decedent, estate administration expenses, and qualified charitable gifts.
The executor of the estate is required to pay Illinois state taxes within nine months after the decedent’s death.
For more information about Illinois state taxes, contact an experienced Chicago estate tax attorney.Surviving Spouse Exemption
Under Illinois law, property transferred to a surviving spouse is exempt from Illinois estate taxes.Federal Estate Tax Rules
As an estate tax lawyer in Chicago will explain, in addition to being subject to Illinois estate tax, your estate may also be subject to federal estate taxes. Under current law the federal estate tax affects only estates that are worth more than $5.49 million. This amount will increase to $5.9 million in 2019. Currently, the maximum federal estate tax rate is 40%. This means that if your estate is worth more than $5.49 million, then your estate will have to pay up to 40% of its value in estate taxes to the federal government.Additional Filings
In addition to filing federal and Illinois estate tax forms, there may additional filing requirements for the estate and for the decedent that executor is responsible for filing. As part of the estate accounting, the executor must include any money paid out of the estate for paying taxes.Contact the Law Offices of Stephen Bilkis & Associates
Both federal and estate tax returns are complicated. It is important that you work with a professional with experience in preparing Illinois estate tax returns and federal estate tax returns. In addition, to ensure that you understand all reporting and tax payment requirements related to the decedent and the decedent’s estate, discuss the matter if an experienced estate tax attorney serving Chicago at the Law Offices of Stephen Bilkis & Associates. Furthermore, if you are looking to save on estate-related taxes, we can create an estate plan that is tax advantageous. Contact us at 855-454-5529 to schedule a free, no obligation consultation regarding your case. We serve individuals throughout Chicago.