Are tax attorneys worth it?

Are tax attorneys worth it?
Are tax attorneys worth it?

Tax attorneys and accountants, both can help you in the hour of need but hiring a tax attorney has a more ominous meaning. It means that you are no longer wrangling with figures- you are hiring a person to fight the law.

Tax lawyers can handle matters that accountants cannot. All they do is wrangle with numbers. However, both have the ability to handle past problematic estate issues. They both work to help you plan your best course for the future.

Who are tax attorneys?

A tax attorney is a lawyer who specializes in the technical and complex field of tax law. They are hired to handle your legal and technical issues related to your tax situation. Generally, a tax attorney steps in after a problematic situation but it is better to seek advice in advance for best tax planning.

When do you need a tax attorney?

The expertise of tax attorneys is focused on the technical and legal complications of the tax situation. For instance, if you are facing a legal tax matter as well as an accounting problem, it is best to look for an attorney who is an enrolled agent or a certified public accountant. They tend to be expensive but they handle the matters best.

Here is why you need a tax lawyer:

You have a taxable estate

The IRS, Internal Revenue Service has its eyes on taxes but the story does not end on personal tax returns. They have eyes on capital gains tax as well. You are liable to file tax returns if you own an estate.

As of year, 2020, your estate is a taxable asset if the total value of the property at the time of your death equals or exceeds $23.16 million. Most people do not worry about tax planning as the property value usually does not exceed but your heirs are liable to pay 40% of the estate value if it exceeds the threshold value.

A tax attorney can help you devise estate tax planning strategies to help you stay below the threshold value and prevent a significant amount of estate value from going into the IRS’s hands.

You are starting a business

Are you looking forward to establishing a corporate? If not, what business are you planning to set up? Any business you are setting up will have tax ramifications for sure. A tax attorney can advise you about your company’s tax treatment and structure including non-tax issues that you might not have thought of, otherwise.

If you are launching a business with international relations, you would need help in legal matters, tax treatment, and other contracts. The presence of a tax attorney in this situation can be viable.

You have legal tax issues

If you are under investigation by Internal Revenue Service, considering fighting against IRS or want to seek advice on a legal tax case before going to US court, you will require an experienced tax lawyer. Although non-attorneys can represent a client, it is always good to go with someone who is well-versed with the tax laws.

What questions should you ask your tax lawyer?

Here are a few questions that you should ask the tax lawyer during the initial meeting:

  • How much does the tax attorney charge?
  • For how many years has he been representing clients with legal tax issues?
  • Is he admitted to the state bar?
  • What area of tax law does he specialize in?
  • If the tax lawyer cannot help you, can he refer you to another experienced tax attorney?

Tax is a complex business and it is always better to seek the help of a knowledgeable yet experienced tax attorney to help you resolve legal tax issues.

Do you have to pay taxes on an inheritance?

Do you have to pay taxes on an inheritance?
Do you have to pay taxes on an inheritance?

If you have received an estate or a bequest from a deceased family member, you are liable to pay 3 taxes: estate tax, inheritance tax, and capital gains tax. An inheritance is subject to the estate you have received from a deceased family member, given it exceeds a specified value set by the federal and state government.

On the other hand, the estate tax refers to the tax that is subject to the value of the estate before it is handed over to the heirs. Technically, it is not paid by the heirs but by the estate. However, the estate tax reduces the value of the inheritance altogether.

Taxes at the federal level that you have to pay on inheritance

Ideally, the Internal Revenue Service cares most about the capital gains tax you owe after you own the estate. Technically, the federal government does not impose an inheritance tax. The property you will owe will not be subject to income tax. For instance, if your father has left you $50,000, it is not considered as income. Therefore, you won’t be liable to pay inheritance tax on it.

Inheritance tax at the state level

There’s nothing much to worry about inheritance tax on the property/estate you have received from your deceased ancestors unless you live in the following 6 states:

  • Nebraska
  • New Jersey
  • Maryland
  • Kentucky
  • Pennsylvania
  • Lowa

However, if the deceased lived in the other 44 states and leaves you a gift or estate there, you can collect it as a gift without having inheritance tax levied on it. This law is applicable even if you live in the above-mentioned states.

There are exemptions on inheritance tax in all the 6 states. For instance, New Jersey and Kentucky work on the class beneficiary system. If you are a spouse of the deceased person, you come under class A beneficiary. None of the states you live in will collect the inheritance on you.

However, the states of Pennsylvania and Nebraska collect inheritance taxes from the grandchildren as well as the children of the deceased family member.

Federal income and state income taxes

You are not liable to state your inheritance to federal or state income tax returns because inherited money is not considered as taxable income. However, the property or estate you inherit might be subject to inheritance tax if you live in the 6 states mentioned above.

The capital gains tax

The capital gains tax is applied to the difference between the actual value of the estate and the value you sell it for. If you sell it in less value, the capital is lost and hence, no tax is due. Otherwise, tax is levied on the difference value you sold the asset for.

The long-term capital gains tax rate is technically better than taxes individuals are subject to on their monthly incomes.

For instance, you inherit an estate that’s valued at $250,000. Let’s say you sell the property for $275,000 10 years after the death date. In this case, you owe a long-term capital gains tax on the $25,000 you made.

Even if the deceased purchased the value for $90,000, your capital gains tax won’t be calculated using this value.

Federal estate and state estate taxes

Federal estate and state estate taxes might also come in due if you inherit a property. But the good news is, the state exemption is $11.4 million. An estate won’t be subject to tax if the value of that estate is less than $11.4 million.

If any estate owes state taxes, it must be paid before you can inherit the estate.

Why you must get the help of a finance lawyer

Why you must get the help of a finance lawyer
Why you must get the help of a finance lawyer

As a business owner, you need to think about obtaining the support and assistance delivered to you by a finance lawyer at all times. Instead of hiring a general lawyer, you need to be specific about seeking the assistance of a finance lawyer. Then you will be able to experience numerous benefits that will be sent on your way. In fact, it will be one of the best steps that you can take in order to overcome the negative consequences that you are going through as well.

What services can you get from a finance lawyer?

The finance lawyers are providing their support for businesses as well as individual clients. If you have any legal issue to deal with and if that legal issue is related to finances, you need to make sure that you are hiring a finance lawyer. Then the lawyer will be able to take a look at the consequences that you are dealing with and provide the highest level of support and assistance to you at all times.

For example, some of the business owners tend to seek the assistance of finance lawyers when they are looking forward to tap into debt markets. On the other hand, the finance lawyers also provide support and assistance for the corporations along with restructuring the businesses. When you are restricting your business, you will come across the need to pay your attention towards numerous factors. The finance lawyer you select will be able to pay attention to those factors on behalf of you. The best thing about hiring a finance lawyer is that those factors will be considered along with the background knowledge in law. Hence, you will be able to end up with receiving quality results at the end of the day.

When you deep dive and take a look at the finance lawyers, you will notice that they have specialized knowledge with regards to different areas. For example, you will be able to get the help of a finance lawyer, who specialize in real estate finance, project finance, banking and private equity. Moreover, they have a strong industry knowledge as well.

The finance lawyers have obtained their approval from the Bar Associations. They have the license to practice as expert finance lawyers and deliver the support needed by businesses. Therefore, you can contact a finance lawyer without keeping any doubts in mind and proceed to get the job done.

You will also be able to break down the field of finance lawyer into multiple practices. They include private equity finance, real estate finance, project finance, banking and many more. Depending on your requirements, you can go ahead and get the help of a finance lawyer who specializes accordingly. Along with that, you will be able to get the support needed to overcome the struggles.

How can the finance lawyer help you with?

When you want to get the help of a finance lawyer, you will need to do a research and figure out the experts who are available to deliver the support you need. Once you locate an expert who can support you, you need to get in touch with the lawyer. Then you will be provided with guidance.

During the meetup, you should clearly explain the struggles that you are going through. Along with that, you will be provided with a clear overview of the struggles that you go through and how law will be able to provide the support you need.

For example, if you are going to set up a new business, you will not have a clear understanding on how to manage the financial aspects linked with it. You can get in touch with the finance lawyer and obtain the support you need. Then you can ensure that you receive all the support needed to overcome struggles. You can learn all the steps that you need to follow in order to set up the business and initiate your business operations. If you can stick to the guidance, you will not come across any issues as well.

We often see how businesses out there in the world struggle hard to manage their taxes. If you can get the help of a finance lawyer, you will be able to overcome the pain associated with filing taxes. The finance lawyer will be able to work closely with the accountants that you have in the business and deliver the support that is needed. In addition to that, the finance lawyer will be able to provide appropriate guidance on how you will be able to prepare appropriate documents.

Even if you are about to start a new bank account under the business, you need to ensure that you get the help of a finance lawyer. In addition to that, businesses tend to seek the assistance of a finance lawyer to obtain credit card numbers and tax identification numbers as well.

When your business is working along with clients, you will come across the need to develop contracts. These contracts will ensure the legal binding that your business has with clients. You can receive support and assistance to overcome them with the guidance that you obtain from a finance lawyer. You will be able to overcome the issues and make sure that you never run into any issues at the time of creating contracts. On top of that, you can ensure that there is no possibility for the client to exploit the contract.

The finance lawyers are in a position to represent yourself at the trials as well. Some of the people assume that a finance lawyer is someone who is only working from office. If you assume like that, you are mistaken. When you are facing a legal trial, your finance lawyer will be able to defend you. You will be provided with guidance by questioning the experts, delivering supporting evidence to the courts and cross examining the witnesses. On the other hand, your finance lawyer will also be able to make closing arguments. This will eventually help you to win the case that you are dealing with.

If you are in need of any of these services, you should contact a finance lawyer. You will fall in love with the way how your finance lawyer will be able to support your business and help you with managing your business operations in the long run. You will be able to keep your business up and running with the support delivered by finance lawyer.