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Taxes

Social Security Survivor Benefits

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Various benefits are available under the Social Security Laws to the survivors of a deceased worker who, at death, had enough credits and was fully insured.

 

At what age can a widow or widower collect? Widow’s or widower’s benefits, albeit reduced, are available when the surviving spouse reaches age 60, provided the widow or widower has not remarried before age 60. If the surviving spouse is disabled, benefits are available at age 50. If a widow or widower is receiving benefits based on the Social Security earnings of his or her late spouse, that widow or widower may, at a later date, switch to his or her own retirement benefit as early as age 62. This would make sense if the widow or widower own retirement benefit was of a greater amount than the survivor’s benefit.

Are survivor benefits available to divorced spouses? Survivor benefits are also available to divorced spouses, following a marriage to the now deceased worker that had lasted at least 10 years. Remarriage may disqualify the widow or widower from survivor benefits under certain circumstances. The amount of the benefit is pegged to the deceased worker’s “primary insurance amount” (PIA) rather than the widow’s or widower’s. The PIA is the benefit a person would receive if he/she elects to begin receiving retirement benefits at his/her normal retirement age.

Do the minor children of a deceased employee and dependent parents have benefits? Survivor benefits are also available to minor children of the deceased worker if they are in elementary or high school, but not college. Survivor benefits may be available to elderly (age 62 or older), dependent parents of a deceased worker if they do not have meaningful Social Security Benefits of their own. A family maximum benefit generally applies.

Surviving spouses, children and parents are entitled to various substantial benefits depending upon the specific circumstances. Urbach & Avraham, CPAs’  partner, Aryeh Levy, specializes in maximization of one’s Social Security benefits.  Please contact us for a consultation regarding your situation.

 

Urbach Teaching Divorce Taxation Webinar

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Back by popular demand, Jeff Urbach, partner, a long time NACVA (National Association of Certified Valuators and Analysts) Instructor and Course Developer, will be teaching Divorce Taxation Including the Impact of the 2017 TCJA (Tax Cut and Jobs Act) for the third time in 2019. The course is Day 5 of a Five-Day Matrimonial Litigation Series of Webinars given by NACVA.

What will the course cover?

  • Impact of TCJA
  • Taxation of Alimony and Equitable Distribution 
  • Marital Residence
  • QDROs
  • Marital Tax Fraud
  • Tax Filing Status
  • Other Related Topics

Jeff authored this popular course and first taught it in Ft. Lauderdale in December 2018. Since then, he led a Webinar in March 2019 and presented the class live at the NACVA/CTI 2019 Annual Consultants Conference in Salt Lake City in June 2019.

When?

The webinar is on Friday, August 9, 2019 at 1:00 PM EST is open to anyone through registration on the NACVA (www.nacva.com ) website. It will also be presented live again in Ft. Lauderdale in December 2019.

Who can benefit?

Attorneys and financial experts involved with the complex area of divorce taxation will find this program helpful either as a refresher class for experienced practitioners or an introduction for those new to the field.

NJ Death Taxes are not all Dead

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Prior to 2018, all NJ estates in excess of two million dollars were subject to the NJ estate tax. As of Jan. 1, 2018, NJ repealed its long-standing estate tax. Even out-of staters with beach houses no longer are subject to the NJ estate tax.

When Aunt Em passed away, you as the favorite niece expect to inherit without any NJ death tax. Not so fast, the wicked witch is still not dead.

NJ Inheritance Taxes are still haunting us

New Jersey imposes two death taxes- the estate tax and the inheritance tax. The inheritance tax in NJ is alive and kicking. This tax has different rates depending on who the beneficiaries are.

Is anyone exempt from this inheritance tax? Immediate family members, who are Class A beneficiaries, can inherit without paying the tax. Class A beneficiaries include spouses, parents, grandparents and descendants- children, grandchildren and great-grandchildren of the deceased.

What are the rates? For assets passing to Class C beneficiaries the rate is 11% to 16% for amounts in excess of $25,000. This class of beneficiaries includes siblings, and the spouse, widow or widower of a child of the decedent. For assets passing to all other beneficiaries (Class D beneficiaries-nieces, nephews, sisters and brothers-in-law, cousins, etc.) the inheritance tax rate is 15% to 16%.

Any surprise situations? Frequently there are unusual situations which unexpectedly trigger the NJ Inheritance Tax. Uncle Henry, a widower, leaves all his assets to his children. No NJ Inheritance tax- right? Read the Will carefully. Henry had been living with his girlfriend in recent years and left her the right to remain in his home for two years after his passing. This right to live in the home is called a life estate. It is an asset subject to NJ inheritance tax in this case because the recipient, his girlfriend, is a Class D beneficiary.

Grandpa Zeke was widowed and remarried. He leaves all his assets to his grandchildren and to the grandchildren of his second wife. Step-children are Class A beneficiaries and exempt from the inheritance tax. However, step-grandchildren are not Class A beneficiaries but rather Class D and subject to the tax.

How is the tax paid? The NJ Inheritance Tax Return, Form IT-R for residents or Form IT-NR for non-residents, must be filed with the state and the tax paid within eight months after the decedent’s date of death. The state automatically places liens against a decedent’s property until inheritance taxes are paid, or it is established that the recipient of the property is exempt.

Need estate tax planning? We work with many qualified estate tax attorneys who are wizards in estate taxation and can assist you in estate planning. Our CPA firm prepares NJ Inheritance Tax Returns and assists executors in filing timely and paying the lowest tax possible.

 

NJ Tax Amnesty: Cool Savings Despite Sizzling Summer Heat

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 Businesses and individuals facing unpaid NJ tax liabilities may be able to get a break on penalties according to the tax amnesty measure signed into law on July 1, 2018. The amnesty period will not begin before November 1, 2018 and will end by January 15, 2019. The program will apply to state tax liabilities for tax returns due on and after February 1, 2009 and prior to September 1, 2017. The measure will apply to all state taxes including gross income, corporate business tax and sales and use tax. However, it does not apply to unemployment type taxes administered by the Department of Labor. 

Why should I do this now? Because under this limited-time offer (remember, the clock runs out by January 15, 2019) the Division of Taxation will forgive all penalties, and one-half of the accrued interest due at Nov. 1, 2018. 

Here are some more details

    • The program will also apply to amounts currently under audit or being contested with the NJ Div. of Taxation.
    • A start date for the program has not yet been announced.
    • NJ Amnesty will provide relief for 2009 – 2016 delinquent individual or business tax return filers.
    • The program also forgives all penalties and 50% of interest for delinquent sales and use tax filings for quarters ending Dec. 31, 2009 – June 30, 2017.

Is there a hitch?  Sort of. The bad news is that if a taxpayer is eligible for amnesty and does not take advantage of it, an additional 5% penalty will be added to the already imposed penalties and interest on the original tax liability.

To see if this program is right for you, please contact our Tax Manager, Steven Citron

 

 

Executor of Estate? Use our Executor Checklist

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In Charge of Dad’s or Mom’s Estate? 

Overwhelmed?

When a loved one passes away and you’re named as executor of his or her estate, you’re likely to feel a mix of emotions. Sadness over the individual’s demise, of course but mixed with that, will be feelings of apprehension: “How can I be sure I’m honoring the decedent’s last wishes and fulfilling all my responsibilities?”

What Do I Need to Know?
The responsibilities aren’t limited to deciding who gets which assets – it also means identifying all the decedent’s assets, and ensuring that the proper paperwork is filed with the IRS, the State and other agencies. To help you through this overwhelming time, Urbach & Avraham, CPAs has prepared an Executor Checklist that outlines the issues that an executor needs to consider.

Click here for the link to our Executor Checklist

Difficult Beneficiaries?….Family Owned Business?….IRA Nightmares?
The checklist is a roadmap of tasks, from probating the will, to filing a final Income Tax return and other required estate filings, to dealing with beneficiaries and distributing the assets. It’s loaded with tips on how to locate all assets, save various taxes and efficiently manage the estate administration.

This handy guide is packed with reminders about technical questions for your CPA, legal or other financial advisor. We work with many qualified estate attorneys to seamlessly coordinate your situation.

Finally, the Urbach & Avraham Executor Checklist highlights the complexities presented when a family owned business is involved. Was there a buy sell agreement? Who is paying the estate tax on the business, and are funds available to pay the tax?

As an executor, you’re already coping with a lot of emotional and other issues. We’re available to help lift the financial burden by assisting you with accounting and tax matters during this difficult time.