Planning for Life

By Harry S. Margolis

Congratulations! You've retired. You're free to spend your time as you like. Life should be simple.

But, of course, many parts of it are more complicated. You no longer have health insurance provided by your employer. Instead, you have Medicare and must decide on what Medigap policy and Medicare drug plan to sign up for. And should you save money by joining a Medicare HMO?

And then we come to tax planning. One client recently asked advice on how to minimize taxes given than he has income from the following sources:

By Harry S. Margolis

With the threshold for federal estate taxes set at $11.58 million as of 2020 (it adjusts each year for inflation), very few estates have to file a federal estate tax return. In contrast, the Massachusetts threshold is $1 million, meaning that many more estates must file a Massachusetts return. For estates that fall between $1 million and $11.58 million, it can still make sense to file a federal return if the decedent left a surviving spouse.

This is for two reasons: portability and capital gains step up.

By Harry S. Margolis

Very few people need to worry about federal estate taxes today with the threshold for taxation now at $11.58 million (in 2020) and surviving spouses permitted to add on the unused portion of their deceased spouse's credit through "portability." Yet many people have estate tax planning trusts put in place when the threshold was much lower and before portability was enacted. As recently as 2003, the threshold was $1 million and before 1998, it was just $600,000.

By Harry S. Margolis

There are many types of taxes out there: income, sales, real estate, estate, excise and capital gain. The tax you may be able to avoid or minimize most through planning is the tax on capital gains. Here's what you need to know to do such planning: