How much can you inherit in Arizona and pay zero, big fat zero in taxes? Would you like to know? It’s not a big secret. Arizona doesn’t impose estate taxes.
They don’t have a tax on the estate, but the federal government does. It’s about $12 million, if you’re under $12 million, you won’t pay any estate tax at the federal level. If you’re over the $12 million, you’ll pay about 50% of every dollar over. Unless you do some strategies and plan to avoid that because, why, you worked for it, don’t pay it to the federal government.
So no estate tax in Arizona, no estate tax if you’re under $12 million. What about other taxes? Capital gains taxes, maybe. Income taxes, definitely. If you’re living on an IRA for your spouse, to your kids, any IRA is going to be taxed at dollar one. They pay taxes at whatever tax rate they’re at. Basically, it’s added to my annual tax since I am the beneficiary.
So you can avoid it. There are some good strategies there but that’s the typical thing that people do. They leave those and they pay taxes on them. So, that’s it. No estate taxes in Arizona, only at the federal level. Capital gains taxes, sometimes you can avoid it. Income taxes on retirement and 401 (k), you have to really plan to avoid that, otherwise, it’s dollar one.
Summary
Having an inheritance can be exciting but part of it is understanding taxes as well. You don’t want to get the money and leave your taxes hanging. That’s why it’s important to learn the amount limit you can inherit to avoid taxes or some tactics to handle this. Keystone Law Firm offers free consultations to give you strategies and further talk about this matter.
