Come to the Rescue While Reducing Tax Exposure
September 20, 2012 By Kuhn & Kuhn Law Firm
A study was released earlier this year by the American Journal of Medicine regarding bankruptcies caused by medical bills that were simply too overwhelming to address. They found that in 2007 62% of all bankruptcies were due to an inability to pay health care debt. If you are in a position to assist family members who may be in financial difficulty due to medical bills you may be concerned about the gift tax.
In fact,there is an exemption here.The tax code allows for Americans to pay the medical expenses of others as a gift free of the gift tax. It should be noted that you have to pay the bills directly rather than giving the money to the debtor.
A lot of people who have to file for bankruptcy because of medical debt did in fact have health care insurance when their physical problems started.But on the other hand many did not. With this in mind,it is useful to note that you can pay the premiums for health care insurance covering someone else as a gift free of the gift tax as well.
Obviously helping people that you care about is personally rewarding. But if your estate exceeds the estate tax exclusion amount you are actually divesting yourself of resources that would potentially be taxed at a very high rate. Right now that rate is 35%;next year it goes up to 55%.
Utilizing resources to help people in need rather than giving much of this money to the tax man is quite appealing to many individuals.If you would like to learn more about tax-free giving opportunities don't hesitate to pick up the phone to arrange for a consultation with a good South Carolina estate planning lawyer.
ABOUT THE AUTHOR: John Kuhn
Experienced estate planning attorneys Charleston NC of the Kuhn and Kuhn Law Firm offers estate planning and business planning resources to residents of Charleston, NC.
Copyright Kuhn & Kuhn Law Firm
More information about Kuhn & Kuhn Law Firm
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
A lot of people who have to file for bankruptcy because of medical debt did in fact have health care insurance when their physical problems started.But on the other hand many did not. With this in mind,it is useful to note that you can pay the premiums for health care insurance covering someone else as a gift free of the gift tax as well.
Obviously helping people that you care about is personally rewarding. But if your estate exceeds the estate tax exclusion amount you are actually divesting yourself of resources that would potentially be taxed at a very high rate. Right now that rate is 35%;next year it goes up to 55%.
Utilizing resources to help people in need rather than giving much of this money to the tax man is quite appealing to many individuals.If you would like to learn more about tax-free giving opportunities don't hesitate to pick up the phone to arrange for a consultation with a good South Carolina estate planning lawyer.
ABOUT THE AUTHOR: John Kuhn
Experienced estate planning attorneys Charleston NC of the Kuhn and Kuhn Law Firm offers estate planning and business planning resources to residents of Charleston, NC.
Copyright Kuhn & Kuhn Law Firm
More information about Kuhn & Kuhn Law Firm
View all articles published by Kuhn & Kuhn Law Firm
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
