Tax Planning

Leaving Texas or Home State to Retire? Do Estate Planning Homework First

Published on: December 8, 2014 | By McCulloch & Miller, PLLC

"During their careers, their 'acquiring wealth years,' many people live in places that have lots of jobs – and the higher cost of living that goes along with that," Friedman says. "In retirement, many of them want to move to a state where they can enjoy the same or an even better lifestyle with less money. For that, it's essential to consider not only the cost of living but the state laws that affect your accumulated wealth and income."

Pre-retirees need to consider a lot more than snow days and tradition, according to a 2014 Bankrate report and a recent Investor Ideas article titled "3 Tips for Retiring Out of State."

States have different tax laws and other regulations that can significantly affect your retirement funds. Be aware of these as you plan for where you want to live and how you want to live.

Four Quick Facts About the U.S. Tax Court

Published on: December 5, 2014 | By McCulloch & Miller, PLLC

Recently, I attended the American Association Attorney-Certified Public Accountants (AAA-CPA) symposium at the United States Tax Court in Washington, D.C. I heard U.S. Tax Court Chief Judge Michael B. Thornton discuss court operations in the context of assisting taxpayers "get their day in court." Chief Judge Thornton stressed that the Tax Court is considered a "people's court" and the operations of the court strive to be user-friendly for taxpayers.

A few facts about the U.S. Tax Court:

1. A tax case can be filed in the U.S. Tax court without the taxpayer paying the contested tax PRIOR to the proposed Tax Court hearing.

Does Your Houston Estate’s Library Hold Great Value?

Published on: December 3, 2014 | By McCulloch & Miller, PLLC

Managing an estate can be complicated and overwhelming, but libraries can often be sources of hidden value, and thus should not be ignored. There's always a chance that tucked away in that library are a few rare first editions or hard-to-find antique items. But if you're facing hundreds of volumes and you have little experience with books, where do you start?

Libraries and rare books may not be your idea of a good inheritance, but they can actually be hidden treasures if you do your research. A recent JD Supraarticle, titled “California Estate Planning: What to Do if You Inherit a Library,” warns against failing to value books that are left as part of an estate.

You never know if the library has tucked away an inscribed first edition of “For Whom the Bell Tolls” by Ernest Hemingway. That’s going for $8,500 on Ebay right now. Or maybe a signed J.D. Salinger “The Catcher in The Rye.” Asking price for this is only $55,000 these days. These rare first editions or hard-to-find antique items are out there. If you are left with the responsibility of sorting through a collection containing hundreds of volumes, and you have little experience with books, where do you start?

Planning for Death Is Unpleasant; Critical for Houston Families

Published on: December 1, 2014 | By McCulloch & Miller, PLLC

Once someone dies there is much work to be done. These are a few suggestions to help you get administratively organized for death.

To make death easier for all involved, it’s critical to plan some of the issues related to death far in advance with some contemplation to make everything go as smoothly as possible when a loved one passes away.

When a loved one dies you have to remember IRS deadlines, Social Security Administration requirements, compliance with state laws, and dealing with other grieving family members. There’s also the chance you might have some relatives who feel entitled to more or different assets.

Houston Business Owners: Tax Tips-N-Tricks for 2014

Published on: November 24, 2014 | By McCulloch & Miller, PLLC

Continual planning is essential for finding opportunities that will reduce the financial burden. Several options exist to help corporations retain wealth and reduce taxes legally.

At the end of the business year 2014, companies will be examining data to see if there are any tax savings available on defined contribution, benefit, cash balance and 401(k) plans.

A recent article on the InsuranceNewsNet website, titled “Important Tax-Planning Tips for Business Owners In 2014,” states that retirement packages can decrease tax liabilities by deferring income. The original article notes that gathering this data will allow business owners to make informed decisions about potentially accelerating deductions and deferring income into the next quarter. Compiling financial projections and reports is extremely important for proper tax planning.

Hey Houston Millennials, You Better Start Saving!

Published on: November 21, 2014 | By McCulloch & Miller, PLLC

Cash-strapped millennials are slipping into the red. In fact, their savings rate has dipped to negative 2 percent, meaning that they're spending more than they have.

The unemployment rate was down to 5.8 percent last month and the U.S. economy added 214,000 jobs. However, a recent article on the CNN website, titled “Millennials aren't saving a dime,” reports that most millennials are in trouble even though the job market looks brighter.

Keep in mind, wages have remained flat without much increase since back in the 1990s. As a result, even with good news about jobs and the low unemployment rate, millennials continue to have a rough time making ends meet.

Estate Tax Changes Are Favorable, But Different Worries May Arise

Published on: November 20, 2014 | By McCulloch & Miller, PLLC

State and federal estate and inheritance tax rates are what drive most people’s estate plans, but now that tax rates are falling and exemptions rising in many jurisdictions, how much people will leave their heirs isn’t what keeps them awake at night anymore. What they really worry about is how the money they leave will affect the lives of those who will inherit it.

Are you cheering for the new death tax changes on the horizon, or will you be up all night worrying about the potential downsides to your Houston estate?

So-called “death tax” rates have been the subject of much debate, reform, and repeal over the past 15 years. Some say that repeal will suppress entrepreneurship and economic growth. However, tax rates have been unreliable, so it's hard to use them when looking at a long-term estate plan. A recent Forbesarticle, titled "Estate Planning Fears That Keeps Us Up At Night,"explains what this means.

Houston Families: Don’t Shy Away from Key Estate Planning Questions!

Published on: November 19, 2014 | By McCulloch & Miller, PLLC

Establishing a will is a vital part of protecting your financial legacy and there is no benefit in delaying it. Here are six often-avoided questions to help you get over your fear of wills and establish one for your family.

There are no silly questions when it comes to your Houston estate plans!

A recent Forbes article, titled "6 Questions About Wills You Were Afraid To Ask," gives us some answers to several often-avoided questions to help alleviate some trepidation over wills and to motivate you into creating one for your family. Here are a few of them:

Five Estate Planning “Don’ts” for Houston Families

Published on: November 18, 2014 | By McCulloch & Miller, PLLC

To prevent you and your family members from enduring more stress, misery or confusion than necessary, here are five estate-planning booboos to avoid …

Think you have the right ideas when it comes to your Houston estate? You may want to watch out for some common "don'ts" in the estate planning world.

The Financial Post's recent article, titled "‘Your grandfather’s dead. It’s my money now': Five estate-planning mistakes to avoid," discusses some typical estate planning mistakes.

Get The Latest on Grantor Trusts

Published on: November 17, 2014 | By McCulloch & Miller, PLLC

“Income-tax rates are going up so it becomes more expensive for a grantor to maintain the grantor trust status of a trust they’ve set up,” says Lynn Halpern Lederman, managing director and senior fiduciary counsel – Northeast Region at Bessemer Trust, a New York firm that oversees $97.5 billion.

A Wall Street Journal article, titled "Rethinking Some Grantor Trusts," says that the latest bull market created potentially substantial taxable gains for individuals—and with the top federal rate on long-term capital gains at nearly 24%, as compared to 15% in 2012—there's a concern that some people may have a harder time paying that income tax bill.

How does this affect grantor trusts?