Tuesday, March 26, 2013

Illinois Gets In On The Tax

We spent the last few columns explaining this year’s positive change in the federal estate tax laws.  In short, up to the amount of $5,250,000 after death may be passed to anyone without having to pay an estate tax.  That exemption amount will automatically be increased to adjust for inflation.

Of course, we live in Illinois, so there is more to the story.  The exemption amount for 2013 and beyond in Illinois is $4 million, and it is not automatically inflation adjusted. 

It is not easy to determine what the tax rate is for Illinois’ estate tax.  It is what they call an ‘interrelated calculation’ involving a theoretical version of the federal estate tax return (which is over 30 pages long before counting attachments).  Thus, so far as we are aware, only a select few attorneys or CPAs would be able to calculate the amount of tax in any estate themselves.  And it would be trying even for them. 

So the Illinois Attorney General has an estate tax calculator on its website that will do the multiple calculations required.  For the curious, there are links to the Attorney General estate tax calculators for 2012 and 2013 when you select the “Tools and Links” button on the left side of our website, which is GruberLawOffice.com. 

While most people do not need to worry about having more than $4 million at death now, in the future it could become a problem, just like the ‘old’ (until 1997) federal exemption of $600,000 became a problem for ordinary people. 

For advice about minimizing taxes and problems for your family after your death, call our office at (815) 436-1996 for an appointment.  © 2013 Gruber Law Office, Ltd.


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