Marc J. Soss, Esquire. - Sarasota Estate Planning, Corporate & Probate Atty

01/25/2022

Each year, the IRS considers inflationary adjustments to the estate and gift tax exemption amount and gift tax annual exclusion amount. The 2022 adjusted numbers are:

2022 Exemptions and Exclusions: The estate and gift tax exemption amount has increased to $12.06 million per person in 2022 (from $11.7 million per person in 2021)

2022 generation-skipping transfer tax: The exemption amount has increased to $12.06 million per person.

January 1, 2026: If Congress takes no action between today and December 31, 2025, the exemption amounts will revert to pre-2017 Tax Act levels ($5 million per person, adjusted for inflation) of approximately $6.5 million per person.

Gift annual exclusion: Every year an individual is permitted to gift another individual, excluding their spouse, a certain amount without incurring any gift tax liability. Effective on January 1, 2022, the annual exclusion amount increased to $16,000 (up from $15,000). The annual exclusion is a powerful tax-saving tool because the person making the gift can transfer wealth without using any of his or her estate and gift exemption amount and without needing to file a gift tax return. A married couple can make a combined gift of $32,000.

2070 Ringling Blvd., Sarasota, FL 34237 Tel: (941) 928-0310

06/29/2021

Federal Court Affirms Employer Right To Require Employees To Be Vaccinated

On June 12, 2021, a federal judge in Houston, Texas issued the first federal court decision addressing whether an employer may require its employees to be vaccinated as a condition of employment. The federal judge ruled that Houston Methodist Hospital (the “hospital”) did not violate the law by requiring, as a matter of policy, that all employees be vaccinated against COVID-19 by June 7, 2021. The court rejected multiple arguments, including that the COVID-19 vaccines currently available “are experimental and dangerous,” the injection requirement violated public policy, employees cannot be required to receive “unapproved” medicines, and that “no currently-available vaccines have been fully approved by the Food and Drug Administration,” and that the hospital’s policy was “coercion.”

05/06/2021

On April 8, the IRS released Notice 2021-25, which provided guidance in determining which meals may be fully deductible under the new IRS rules and which are remain subject to the fifty (50%) percent limitation. Under long-standing IRS rules, the deduction for food or beverage expenses is generally limited to fifty (50%) percent of the amount. In order to be deductible as a business meal, the food must not be lavish or extravagant or the taxpayer (or an employee of the taxpayer) must be present at the furnishing of such food or beverages.

The Consolidated Appropriations Act of 2021, expanded the deduction of business meals to one hundred (100%) percent, if the food or beverages for the meal are provided by a restaurant. This expanded deduction is only allowable for amounts paid or incurred during the calendar years 2021 and 2022. The term “restaurant” is defined as “a business that prepares and sells food or beverages to retail customers for immediate consumption, regardless of whether the food or beverages are consumed on the business’ premises.” The notice also clarified whether certain employer-provided meals would qualify as restaurants under the regulations.

12/18/2020

A very important, but little utilized provision, of The Heroes Earnings Assistance and Relief Tax Act of 2008 (The HEART Act) permits surviving spouses and heirs who receive death gratuities (paid as a result of a death from a service connected illness or injury) and/or SGLI death benefits to invest some or all of the funds into a Roth IRA and/or Coverdell Education Savings Account (ESA). The beneficiary can split the payouts received between the ESA and Roth IRA as they see fit, contributing a portion, all, or nothing to each. Alternatively, they can reserve an amount for immediate expenses.

The contribution and annual income limitations will not apply to this rollover of funds and will provide tax-free growth and withdrawals in the future. The only limitation is that the funds must be deposited into a new or existing ESA or Roth IRA within one (1) year of the beneficiary receiving them, otherwise they forfeit the opportunity to do so. It is important to note that a separate one-year deadline applies to each benefit received.

As with all Roth IRA contributions, the funds may be utilized at any time within the Roth IRA but will be subject to income tax, if removed before the account is five years old, and a 10% early distribution penalty, if under the age of 59½. Distributions from Coverdell ESAs are similarly tax-free to the extent that such funds are used for the beneficiary's qualified education expenses. Distributions that are not used for qualified education expenses are subject to penalties and taxation similar to those for qualified retirement plans.

08/04/2020

2020 Rhode Island Bar Journal Award for Outstanding Contributor.
The Writing Award Committee also recognized Marc J. Soss, Esq., with an Outstanding Contributor Award based on his consistent and significant article submissions on important developments in the law. Attorney Soss has contributed thirteen articles to the Bar Journal in the past ten years, eight of which were submitted in the last five years. Both Gene and Marc will be honored with the awards when large gatherings are safely permitted.

12/31/2019

SECURE ACT IRA CONTRIBUTIONS & DISTRIBUTIONS

Extended Contribution Age for those Working. Dating back to 1960’s concepts, prior law prohibited contributions to a traditional IRA account for those that had reached age 70½, even if still working. This created a dilemma as life expectancies increased and individuals worked later in life to fund longer retirements. The Secure Act now permits individuals to continue contributing to an IRA, so long as they continue working.

Required Minimum Distributions. Beginning Jan. 1, 2020, the age at which an individual will be required to begin making withdrawals from their traditional retirement account will increase from age 70 ½ to 72. This change will primarily benefit retirees who don’t need the funds and have not already reached age 70½. Those who are currently 70½ or older must continue withdrawing their required minimum distributions under current rules. However, those who reach age 70½ on or after Jan. 1, 2020, are subject to the new rules and will have an extra year and a half before they need to start making mandatory withdrawals.

Stretch IRA. The Secure Act effectively removes the Stretch IRA concept as an estate planning tool. Except for a surviving spouse, who may continue to withdraw the inherited IRA account over their life expectancy, beneficiaries will be required to draw down the account over a ten (10) year period. The funds may be withdrawn incrementally over the ten (10) year period, or all in one (1) or more years (including everything in year ten (10). A disabled or chronically ill individual or child of the account owner who has not reached the age of majority will also be excluded from the ten (10) year withdrawal requirement. This provision will not affect individuals who have already inherited an IRA and will only apply to those who inherit them starting on Jan. 1, 2020. This will preclude the account from continuing to grow on a tax-deferred basis into the future.

12/31/2019

Retirement planning is poised for the first major piece of retirement legislation in a decade. After the Setting Every Community Up for Retirement Enhancement (“Secure Act”) was approved by the Senate by a vote of 71 to 23, and the House by a vote of 297 to 120, President Trump signed it into law on December 20, 2019, as a part of spending and tax-extension bills. The Secure Act creates sweeping changes that immediately affect retirees and savers alike.