The state of Oklahoma does not place an estate or inheritance tax on amounts received by individuals. Even though Oklahoma does not require these taxes, however, some individuals in the state are still required to pay inheritance taxes by another state. In some cases, however, there are still taxes that can be placed on a person’s estate. Two of the best ways for a person to anticipate the taxes that might be placed on an inheritance are to understand some of the essential laws involving inheritance as well as to speak with an experienced probate attorney.
Federal and Other State Taxes on Estates
While many states do not place inheritance taxes on amounts, some of these states that due include Iowa, Kentucky, Nebraska, New Jersey, and Pennsylvania. The exact amount that these states will tax depends on several factors including the value of someone’s estate and the beneficiary’s relationship to the deceased person. In addition to state taxes, there is also a federal estate tax that might come into consideration if a significant amount of money is involved. The current amount that requires federal taxes is any inheritance equal to or greater than $5,490,000. As a result, if a person’s estate is less than $5,490,000 and there are no other involved states, an inheritance will likely not be taxed.
The Role of Gift Taxes in Oklahoma
Gift taxes are related to estate taxes but slightly different. Estate taxes are taxes placed on the transfer of one person’s assets to another while a person is still alive. Even in cases where a person does not intend the amount to be a gift, taxes still apply. The Internal Revenue Service allows a person to give up to $14,000 per year to any number of individuals without being required to pay gift taxes. In the event that the amount a person gives exceed $14,000 in a given year, the person who transfer this amount must file a gift tax return, which is also called a form 709, and pay any taxes that are due. Each person has a $5,490,000 lifetime amount before taxes must be paid on a gift. This $5,4900,000 is the same amount that a person is able to pass through inheritance without that inheritance being taxed by the federal government. As a result, any amount that a person pays above the $14,000 gift tax amount reduces the $5,490,000 amount that is tax free in an inheritance. As a result, federal gift tax law actually has a significant impact on the amount that a person can avoid paying in estate taxes.
Contact a Skilled Oklahoma Probate Attorney
If you live in Oklahoma and require assistance with taxes placed on an inheritance or any other type of obstacle that might arise during the probate process, a knowledgeable probate attorney can prove to be very helpful. Do not hesitate to contact Attorney Jim A Lyon. Attorney Lyon has a successful track record helping many individuals with various elements of estate planning.