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Do I Have to Pay Taxes on Money I Inherited?

Do I Have to Pay Taxes on Money I Inherited?

By on Jan 27, 2017 in Tax Tips | 0 comments

If you are expecting to receive a considerable amount of inheritance money, the one thing you need to be aware of is that the IRS expects you to pay taxes on that money.

Many people might be under the misconception that the money that they’re inheriting has already been taxed. Chances are it may have been for the deceased person, but now that the money is exchanging hands, it needs to be taxed again.

Here’s why:

For any United States citizen, any money they receive needs to be reported to the Internal Revenue Service so that the annual income can be taxed accordingly. Taxes are determined by the amount of money each taxpayer receives annually. This not only includes employment wages, but also alimony, child support, dividends, and yes inheritance!

The Difference Between Inheritance and State Taxes

Many people tend to get the inheritance tax confused with estate taxes. The difference between the two is who is responsible for paying it. For estate taxes, the deceased estatepays taxes on the assets before it is distributed to the beneficiaries. Some people do end up paying estate taxes, but that’s only if the total amount of assets is more than $1 million. Like many tax stipulations, this number changes almost every year, but you can expect the numbers to be close to this estimation.

Do You Pay Taxes on All or Some of the Inheritance Distribution?

If you are one of many beneficiaries, you don’t have to worry about paying taxes on the total amount of money distributed. You’ll only be responsible for paying taxes on the amount of money you receive. You will be expected to report that amount and that amount alone toward your annual income. If you think that you’ll need help preparing your taxes with this additional income, contact the professionals at Success Tax Relief to help you file your annual taxes accurately and efficiently.

About Success Tax Relief

Our tax firm has over 30 years of experience helping taxpayers get the most out of their tax return, and if necessary, setting up a payment plan with the IRS in case you owe. Success Tax Relief has an experience team of accountants, tax lawyers, CPA’s and tax preparers all on hand to help you manage any situation that may arise with the IRS. We specialize in communicating to the IRS on behalf of our clients to alleviate and resolve any tax issues you might have.

What Do You Need?

So whether you need help better understanding your inheritance tax situation or you just receive a letter from the IRS, the professionals at Success Tax Relief can help. We are located in LaPorte, Texas and have assisted taxpayers all over the country. We are familiar with tax laws in every state so we’re ready to take care of any tax issue you might have.

Contact our office for a free consultation online, or call us at 877-825-1179. One of our caseworkers is standing by to connect you with a tax preparer to help you accurately report your inheritance today.

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