as long as the decedent lived in Iowa at the time of his or her death. In Iowa an inheritance tax return will have to be filed, which will create a gross estate of the decedent which lists all of the real and personal property in the decedent's estate such as real property (houses) that are located in Iowa, automobiles, personal property, certain types of retirement accounts (employee profit sharing or pension plans, IRA accounts), banking accounts, etc. Lastly, for deaths that occur in 2025 there will be no more Iowa Inheritance Tax, which will save decedent’s beneficiaries who are subject to the Iowa Inheritance tax, a substantial amount of money. Deaths in 2024 will be taxed 80% less than the original Iowa Inheritance tax rates. Deaths in 2023 will be taxed 60% less than the original Iowa Inheritance tax rates. Deaths in 2022 will be taxed 40% less than the original Iowa Inheritance tax rates. Deaths in 2021 will be taxed 20% less than the original Iowa Inheritance tax rates. Iowa has decided to end their inheritance tax starting in 2021 and will completely abolish the tax by January 1st, 2025, between now and then the Iowa Inheritance Tax will reduce by 20% per calendar year starting for deaths that occur in 2021. Iowa Inheritance Tax is Coming to an End by 2025 The beneficiary is responsible for paying this tax, but the executor or personal representative of the decedent’s estate has a duty to ensure that the inheritance tax is collected and paid by the beneficiary to the Iowa Depart of Revenue. Iowa is a state that will tax a decedent’s estate on the assets the decedent owned at the time of his or her death which is now being passed onto the beneficiary or beneficiaries of the decedent’s estate, Iowa will collect a tax upon the beneficiaries of the decedent’s estate, called the Iowa Inheritance Tax. Iowa does not have an estate tax but does have an inheritance tax. If the decedent dies without a will, his or her assets will be passed through Iowa distribution laws to the beneficiaries of the estate. In Iowa when a person called a “decedent” dies and they leave their remaining cash property stocks bonds, banking accounts, certain retirement accounts, real property, automobiles, personal property, these assets are usually left by the decedent to family members or named persons through a will, these people are called the beneficiaries of the decedent’s estate. This article will further discuss and explain the Iowa inheritance tax, how it is calculated, and also changes to the Iowa inheritance tax, which gradually reduced starting in 2021, and phased out entirely by 2025. Iowa is one of six states that has an inheritance tax or “death tax” a death tax is a tax collected from the person you are passing your property or assets to upon your death.
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