Estate taxes are often a worry for those trying to settle an estate. However, they generally only apply to a limited number of situations.
The Ohio Department of Taxation explains the state estate tax ended for most estates. Most estates also will not have to pay federal estate taxes, according to the IRS. However, you may fall into those few cases where you will have to pay the taxes, so it is a good idea to understand the rules.
State tax
The law changed in 2022, which means the exceptions apply to situations prior to the change. Any property found or reported after December 31, 2021, is exempt from the estate tax. In addition, no person can request a refund anymore on taxes paid, and any outstanding taxes are due immediately in full.
Federal tax
Federal tax laws provide a lot of deductions that usually will reduce an estate’s value low enough that there is no tax due. However, the IRS does charge a tax to estates valued at $12,060,000 or more. But the federal law also allows for a spouse to pass the tax due through to her or his own estate, which makes them due upon her or his death.
Keep in mind that you should always check if an estate has taxes due at the state and federal levels. It is better to check than to end up not paying, which can result in costly fees and penalties. In addition, planning ahead for these taxes can help your loved ones after your death to avoid surprise bills from the tax collector.
