tax Tag Archives — Kentucky Law Blog

March 22, 2021

Deadlines For Individual Tax Return Filing Pushed Back To May 17

By ELPO Law Partner Nathan Vinson

The IRS announced on Wednesday that it will push back the tax return filing and payment deadlines for individuals to May 17 from April 15 partly due to the new $1.9 trillion relief law and its impacts on 2020 individual income taxes. We emphasize that this extended deadline is only for individuals, and not partnerships, corporations, or other filing entities. It also does not apply to paying estimated first quarter 2021 taxes, if you happen to fall in that category. Of course this is the case for now, but all could change in the next coming days. Regardless, the deadline for individuals will not revert to any date sooner than May 17.

What is relieving, and interesting for a tax professional, is that individuals can also delay paying taxes due on April 15 until May 17. Traditionally, extended deadlines apply to filing returns, but not paying taxes due. Penalties and interest will not start to accrue on unpaid balances until May 17.

October 26, 2020

Simple End of Year Tax Planning and Wealth Transfer Tips

by English, Lucas, Priest & Owsley LLP

Believe it or not, the end of 2020 is quickly approaching (insert collective sigh of relief). While I think most of us are ready to start looking forward to 2021 and would prefer to not even have to utter the words 2020 anymore, now is the time to finish off the year strong by reviewing simple, yet important, year-end tax planning and wealth transfer tips.

When most people think of tax planning and wealth transfer, they may have in mind complex estate planning documents and an overload of legal and accounting advice. But that doesn’t have to be the case. Here are three simple tips that you can implement with relative ease, though you will want to consult your tax advisor first.

1. The Annual Gift Tax Exclusion. The simplest tax planning and wealth transfer technique involves the all-too-familiar annual gift tax exclusion. The annual gift tax exclusion is an amount that a person may give to another person without having to file a gift tax return or otherwise report to the IRS. The current exclusion is $15,000 per person receiving the gift. The exclusion is indexed for inflation, but it may only increase in $1,000 increments. Further, married taxpayers may elect “gift-splitting,” which basically doubles the amount of the gift that they may make to one person using the gift tax exclusion; for each person receiving the gift, the limitation would be $30,000 rather than $15,000. For example, if a married couple has two children and four grandchildren, they can give up to $30,000 to each of these people tax-free and without having to report it to the IRS. Therefore, the married couple may transfer $180,000 total to the children and grandchildren. Going further, if the children are also married, the taxpayers may give an additional $30,000 to each child’s spouse, which may be desirable if the child and the spouse hold a joint checking or investment account. Note, however, that a gift tax return would need to be filed if the taxpayers elect gift-splitting. The gifts are not taxable at all, but the IRS would like to know that the $30,000 was gifted via gift-splitting.

December 12, 2019

Wayfair the Sales Tax Fanfare

by English, Lucas, Priest & Owsley LLP

Well here we are. It has been well over a year since the United States Supreme Court’s decision in South Dakota v. Wayfair, Inc. As a refresher and not to make your eyes agonizingly glaze over with the down and dirty tax details, Wayfair essentially upheld South Dakota’s tax law that required remote retailers with no physical presence in the state to collect and remit South Dakota sales tax. Prior to Wayfair, states could not require retailers without a physical presence in such states to collect and remit sales tax pursuant to the Supreme Court’s decision in Quill Corp v. North Dakota.

Nathan Vinson

South Dakota’s remote retailer law sets a threshold requirement for its application. A remote retailer must, on an annual basis, deliver more than $100,000 of goods or services into the state or engage in 200 or more separate transactions for the delivery of goods or services into the state. The law therefore contains a so-called small retailer exception.

August 22, 2018

Kentucky’s tax law changes in 2018: New Sales and Use Taxes

by English, Lucas, Priest & Owsley LLP

By Nathan Vinson, Partner

English, Lucas, Priest and Owsley LLP

Tax law changes in 2018 were huge at both the state and national level. For this blog post, we’re parsing through the changes to the law that require sales tax to be collected on some services and “luxuries,” which was not required in the past.

October 26, 2017

Treasury Department announces new limitations for pension and retirement plans, other changes for 2018

by English, Lucas, Priest & Owsley LLP

Each year, the Treasury Department examines the cost of living in the U.S. and adjusts limitations for retirement plans and many other similar items that affect taxpayers throughout the U.S. As has happened previously, the Treasury raised the limits for contributions to pensions and other retirement plans such as 401(k)s, 403(b)s and most 457 plans. All of this helps today’s workers save for retirement with pre-tax dollars, which is a tremendous benefit.

Our tax code requires the Secretary of the Treasury to make this adjustment.

The biggest news is that the contribution limit to employer-sponsored retirement plans, such as the above-mentioned 401(k)s, etc., has gone from $18,000 for calendar 2017 to $18,500 for calendar 2018. If you were bumping up against this limit in 2017, you can now adjust and put in just a little bit more, which is always good news.

May 3, 2016

Win big at the track? Congratulations! Now pay your gambling taxes

by English, Lucas, Priest & Owsley LLP

By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

We’ve written previously about gambling taxes, highlighting this issue mainly because of the affection Kentucky has for horse racing. And as you well know, we’re in the midst of horse racing season. Keeneland had its spring meet, and Churchill Downs is now open for the season, with the Kentucky Derby set for May 7. This will be followed by the Preakness in Baltimore and the Belmont Stakes in New York, and the Breeder’s Cup in November in California.

Lots of us love to put a little dough (or a lot!) down on a horse at the track. There was some talk earlier this year of lowering the threshold at which tracks were required to report winnings to the IRS, but that never moved forward, so far as we can tell.

April 8, 2015

Annulment versus divorce matters at tax time

by English, Lucas, Priest & Owsley LLP

In our last post, we discussed how divorce affects an estate plan. A thorough review of all estate documents is critical post-divorce to ensure you’ve covered every conceivable scenario and changed every document necessary. Allowing an attorney to do that review for you is always in your best interest, as attorneys have a keen eye for details and wording that may escape even a close reader who does not have legal training.

Taking this matter one step backwards, though, we’re examining annulment versus divorce in this post. While both lead to the same conclusion – you’re no longer married – these two scenarios have very different consequences when it comes time to pay taxes.

Both parties may file as married at tax time if they were still legally married at the end of the calendar year. Options include filing a joint tax return, as many married couples do, or checking the married but filing separately box.

March 26, 2015

Six Things to Do When You Have a Child

by English, Lucas, Priest & Owsley LLP

Having a child can be exciting (and stressful). Probably the last thing you might think to do when having a child is to update an estate plan, but it’s absolutely necessary. Here are 6 things to consider when you have a child.

March 19, 2015

Tips from a Kentucky estate lawyer: how to pass on memorabilia and collections in your estate

by English, Lucas, Priest & Owsley LLP

Many people collect all kinds of things, and these collections come to hold tremendous sentimental and in some cases monetary value. As people age, they begin to think about who they would like to have certain items or entire collections, and sometimes, bold relatives or friends suggest they’d like to receive something special to remember you by. Gifts and promises of gifts are also made to honor a special relationship.

These type of collections can cause significant arguments after you are deceased. The best way to avoid such disputes is to clearly specify in writing exactly who is to receive what items. Verbally telling a relative or friend what you would like for them to have upon their death, and giving away significant items while you’re still living, causes confusion and prompts some to get greedy.

It’s the last thing anybody wants after they’re gone.