Disability Severance Pay

  During July 2018, DFAS and the IRS sent letters to approximately 130,000 separated military members who had received disability severance pay as income and with federal tax withholding applied. In accordance with IRS’s current policy, IRS agreed to forward these letters to separated members on behalf of DFAS because DFAS does not have current addresses for individuals affected by the new law. The IRS has not disclosed address or any other tax information to DFAS. A small number of … Continued

Sitting on $11 million? Give it away to save on estate taxes

  If the holiday spirit is encouraging you to gift millions of dollars to family members, it’s time to start sharing the wealth. The Tax Cuts and Jobs Act increased the gift and estate tax exemption — also known as the basic exclusion amount — to $11.18 million per person in 2018, which is more than double the amount under the old law. That means any individual can transfer up to $11.18 million, either as gifts during their lifetime or … Continued

Tool on IRS.gov helps taxpayers research charities before making donations

When people are done giving thanks at the dinner table, many start another kind of giving. The annual Giving Tuesday happens the week after Thanksgiving to kick off the season of charitable giving. This year, Giving Tuesday falls on Tuesday, November 27.<?xml:namespace prefix = “o” ns = “urn:schemas-microsoft-com:office:office” /> Taxpayers may be able to deduct donations to tax-exempt organizations on their tax return. As people are deciding where to make their donations, the IRS has a tool that may help. … Continued

Here’s why the rich hate the estate tax

  Death and taxes may be unavoidable. Taken together, they become a firestorm. The federal estate tax has been a hot-button issue since it was first imposed under the Revenue Act of 1916, when 10 percent was levied on portions of an estate exceeding $5 million. The reason this one component of fiscal policy remains so hotly debated and highly politicized is because Americans are largely divided over its impact. Some believe it is a tool to prevent the concentration … Continued