Seven Ways Minnesota Families Pay Taxes
And Steps You Can Take to Minimize or Avoid Minnesota Estate and Gift Taxes.
USA Today recently ran a story “Seven Ways Americans Pay Taxes” The seven they list are:
- Income taxes.
- Sales taxes.
- Excise taxes.
- Payroll taxes.
- Property taxes.
- Estate taxes.
- Gift taxes.
In the article they note that the federal estate tax only applies to estates in excess of $5.34 million for 2014. However, that number often gives a false sense of security to Minnesota families. That is because Minnesota has its own, separate estate tax, that taxes estates as small as $1 million (including the value of life insurance owned by the estate). And with a tax rate of between 5%-16%, depending on the total size of your estate, that can result in a significant loss to your family.
The article also notes that last year, Minnesota joined Connecticut as the only two states to have a gift tax. Just like the estate tax, Minnesota’s gift tax is separate from, and in addition to, the federal gift tax. The Minnesota gift tax follows the federal guidelines for how much you can give per person, per year. Any gifts above that are subject to the Minnesota gift tax at a rate of 10%.
The good news is that with careful planning, you can minimize, or possibly even avoid, Minnesota estate and gift taxes.
To learn more about how you can plan to pay less taxes, you can check out our video on how to minimize estae taxes above, read additional articles on our site or give us a call today at 763-420-5087.