How to Find Tax Saving Strategies for an Inheritance
If you have money coming from an inheritance, it is important to plan carefully. Depending on the size of the estate and the amount of your yearly income, Uncle Sam may want a piece of the action. Your state, and even your local government, may also want to share in the inheritance, so implementing sound tax saving strategies is vital. Since it is unlikely you are an expert in tax law, you need to find the right help and advice.
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Instructions
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Determine the size of the estate before you get started. If the estate is a small one---less than $1 million---chances are there will be few, if any, federal tax dollars due. If you are dealing with a small inheritance, you might be able to handle the tax paperwork on your own.
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Find out whether your state taxes money from an inheritance. Not all states tax these windfalls, and those that do often have different rules according to the income level of the taxpayer. The best place to start your research is with the revenue department in your state. The phone number for your state's revenue department should be in the blue pages of your telephone book, and the website might be listed on your tax return.
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Contact the person who currently does your taxes and ask the individual if he has experience dealing with estates and taxes. Not every CPA or tax preparer will have experience in this specialized area.
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Seek out a fee-only financial planner to help you with your tax planning and investment strategy for the money from the inheritance. A fee-only financial planner does not make a commission from selling investments. Instead, these individuals charge an hourly fee for their impartial advice. The best place to start your search for a fee-only financial planner is at the National Association of Personal Financial Advisors website (see link under Resources.)
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References
Resources
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