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Tax Law

Sarasota County Senior Exemption with Limited Income

By Elder Law, Real Estate, Tax Law

A resident who qualifies for the homestead exemption can also be eligible for the senior exemption providing that at least one owner of the property is 65 years of age or older and they meet the annual household adjusted gross income limit.  This can be determined by calling the Sarasota County Property Appraiser at (941) 861-8200.

According to the Sarasota County Property Appraiser:  “The limited income Senior Exemption provides an additional Homestead Exemption for residents 65 and over… Within Sarasota County the benefit amount for this exemption has been established by the different governing authorities and varies depending on where you reside:  $25,000  exemption for the City of Sarasota municipal ad valorem taxes, $50,000 exemption for the Town of Longboat Key municipal ad valorem taxes, $5,000 exemption for the Sarasota County ad valorem taxes, and $0 exemption for the City of North Port or the City of Venice municipal ad valorem taxes.”

For more information about this exemption, or if you need other tax planning advice, call our Florida Board Certified Tax Attorney, Fredric Jacobs, at (941) 906-1231.

April 29, 2016
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Are skilled nursing facility fees tax deductible as medical care expenses?

By Long-Term Care, Tax Law

            Because skilled nursing facilities are basically medical facilities, all expenses incurred including room and board are deductible for income tax purposes.  However, independent living facilities are different as only expenses directly associated with medical care are deductible.

For personalized tax planning advice from a Florida Board Certified Tax Attorney, contact our office at (941) 906-1231.

April 19, 2016
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Are assisted living facility fees tax deductible as medical care expenses?

By Long-Term Care, Tax Law

If the client’s physician prescribes assisted living pursuant to a plan of care and the client has either severe cognitive impairment or is chronically ill, 100% of the cost of the client’s monthly charges in the assisted living facility will be tax deductible as medical care expense.  The IRS defines “chronically ill” as applying to a person who is unable to perform at least two activities of daily living without substantial assistance for at least 90 days.  The activities of daily living are eating, toileting, transferring, bathing, dressing and continence.  This tax exemption would not apply to purely discretionary items such as telephone costs or extra meals for visitors.

For personalized tax planning advice from a Florida Board Certified Tax Attorney, contact our office at (941) 906-1231.

April 15, 2016
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How to Become a Florida Resident

By Elder Law, Estate Planning, Government Benefits, Tax Law

Becoming a Florida Resident can lead to significant benefits in access to both beautiful beaches and tax benefits.  One of the most important steps to becoming a resident is submitting a Declaration of Domicile.  In Sarasota County you will need to fill out the Declaration of Domicile and bring it to the Recording Department on the first floor of 2000 Main Street, Sarasota, FL 34247.  You will also need to pay a $10.00 fee for recording the Declaration.  A link to the Declaration of Residency form can be found below:

http://sarasotaclerk.com/FileLib/domicile.pdf

In addition to submitting the form above, consider taking the following steps to declare Florida as your residency:

  • Change your voter registration to Florida and vote here
  • Surrender your out-of-state driver’s license and obtain a Florida drivers license (or a Florida ID card if you do not drive)
  • Register your cars in Florida
  • If you belong to any out-of-state private clubs, change your status from resident to non-resident
  • File your federal income tax using your Florida address
  • If you have taxable assets that require it, file a Florida Intangible Personal Property Tax Return
  • Make primary banking accounts in Florida
  • Update estate planning documents using Florida documents and laws and declare yourself to be domiciled and a resident of Florida
  • Document that the majority of your time is spent in Florida through receipts or other relevant documentation. Report yourself as a Florida resident and use your Florida address when traveling and staying in hotels

 

For help updating your estate planning documents to reflect your Florida residency, contact one of our experienced estate planning attorneys at (941) 906-1231.

March 11, 2016
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What is innocent spouse relief and am I entitled to it?

By Tax Law

Many married couples file joint tax returns but problems can ensue when the IRS determines that under-payment has occurred and decides criminal fraud has taken place.  It is often the case that one person signs a tax return without really looking closely at what their spouse is reporting about their own business.  In this case, one party may be entitled to innocent spouse relief.  If you believe there were errors in the tax return you signed, believe you may be entitled to innocent spouse relief, or are wondering whether you should file a joint return, especially if you have a divorce pending, please contact our Board Certified Tax Attorney Fredric Jacobs at (941) 906-1231.

October 13, 2015
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What is a qualified disclaimer and when should it be used?

By Asset Protection Planning, Elder Law, Estate Planning, Probate, Tax Law

If for financial or tax reasons you do not wish to receive an asset for which you are a beneficiary, you can use a qualified disclaimer to pass this asset instead to other listed beneficiaries.  This may be beneficial for individuals who do not wish to claim an asset they are set to inherit for tax purposes.  To make sure your qualified disclaimer is compliant with IRS codes it must be in writing, delivered within a set amount of time dependent on specific circumstances, and irrevocable.  The assets you disclaim cannot be directed by you and will usually pass to the spouse of the decedent.

It is important to consult an experienced attorney when planning to submit a qualified disclaimer.  Contact our Board Certified Tax Law Attorney Fredric Jacobs, Esq. at (941)  906-1231.

October 6, 2015
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Do IRAs affect Medicaid eligibility?

By Medicaid Planning, Tax Law

With proper Medicaid planning, IRAs can be considered exempt for Medicaid eligibility.  This means that the money in an IRA does not need to be spent in order for someone to qualify for Medicaid benefits.  These benefits can be used to help pay for assisted living facility costs without depleting IRA assets.

For personal Medicaid planning services, please contact our Florida Board Certified Elder Law Attorney Babette Bach at (941) 906-1231.

August 28, 2015
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Avoiding an IRA 10% Early Withdrawal Penalty

By Tax Law

Before you turn 59 ½ you will incur a 10% penalty for withdrawing money from your IRA.  However, there is an exception for people who are below the minimum age requirement but are considered disabled and no longer able to work.  If you meet these criteria, you will need to have your physician sign a letter documenting your disability and attach this letter to IRS Form 5329 to be filed with Form 1040.  Attached below is a letter template for your physician to print on their letterhead and both necessary IRS forms.  Also provide a copy of the letter and Form 5329 to the Plan Administrator so it does not withhold the 10% penalty amount.

5329

1040

Sample letter from Physician to avoid IRA 109 early withdrawal penalty

For individualized tax advice or high net worth tax planning services, contact Fredric C. Jacobs who is Florida Board Certified in tax law and an AV rated attorney at (941) 906-1231.

July 14, 2015
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Form 114 (FBAR) for Foreign, non-US Financial Assets Needs to be Filed by June 30th

By Asset Protection Planning, Tax Law

Were you an account holder for a financial account located outside of the US valued at over $10,000 in 2014?  If so, you must file an FBAR by June 30th.  An FBAR, also known as Form 114, must be filed by anyone who is considered an account holder for a foreign account meeting the value criteria above.

 

    The FBAR form can be found here and can be submitted online:

    FBAR Filing Form

 

    To speak with our Board Certified Tax Attorney Fredric C. Jacobs, Esq. about your personal tax needs or high net worth tax planning, call our office at (941) 906-1231.

June 12, 2015
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When to Obtain an EIN for a Trust

By Elder Law, Estate Planning, Tax Law

Question:  I have just taken over my parent’s trust as the successor trustee.  Do I need to apply for an EIN for the trust?

Answer:  It depends on whether the trust has become irrevocable.  If you become successor trustee of a revocable trust prior to the death of the grantor, then you will not need to obtain an employer identification number (“EIN”).  The grantor will continue to report all of the income and expenses of the trust on his or her individual tax return using their own Social Security number.  However, you should know that once the grantor dies, the trust becomes irrevocable.  Once the trust becomes irrevocable, the trust becomes a separate tax-paying entity.  You will need to complete the application for an EIN as soon as possible so you can properly report all post-death transactions under the trust’s EIN.  If you are the trustee of a revocable or irrevocable trust, contact Bach & Jacobs, P.A at (941) 906-1231 for guidance on the proper administration of the trust.   Attorney Fred Jacobs is a Board Certified Tax Lawyer and can advise you on the legal requirements that trustees must comply with under the Florida Trust Code and the Internal Revenue Code.

November 24, 2014
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