NOVEMBER 2023: MA State Tax Exemption Changes

Concord River Financial

November 07, 2023

As of October 4, 2023, the Massachusetts estate tax filing exemption retroactively increased from $1 million to $2 million for decedents dying on or after January 1, 2023.¹ This is the first increase in the Massachusetts estate tax exemption since 2006.

As an example of this change, the estate of a resident who died on December 31, 2022 with a $2 million Massachusetts taxable estate, owed a Massachusetts estate tax of $99,600. The estate of a resident who died on January 1, 2023, with a $2 million Massachusetts taxable estate does not owe any Massachusetts estate tax.

If an estate tax return for an individual who died this year has already been filed, a refund request may be filed based on the new $2 million exemption.

Estates exceeding $2 million will be subject to tax on the excess at a rate starting at 7.2 percent and increasing with the size of the estate, up to 16 percent.¹

The Massachusetts estate tax owed by the estates of residents who owned real or tangible personal property outside of Massachusetts will be reduced by the proportion of his or her overall estate made up of these out-of-state assets.

Notably, the Massachusetts exemption is not indexed for inflation and is not portable between spouses. For a married couple, trust planning is still required to maximize the use of the exemption for each spouse. Please consult your qualified tax or estate planning professional for guidance.

For more details on this new legislation, please see Massachusetts new estate tax changes FAQ's.

For more information on Massachusetts estate taxes, please see Massachusetts Department of Revenue's Guide to Estate Taxes

^{1https://malegislature.gov/Laws/SessionLaws/Acts/2023/Chapter50}

We are excited to announce that our broker-dealer, LPL Financial, was recently named one of America's greenest companies by Newsweek, awarding LPL a 5-star rating for good stewardship. Of the 300 companies listed, LPL was one of only 62 companies that received 5 stars. You can learn more abouthow Newsweek selected and ranked the companies on this list.
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A reminder that the Healthcare.govenrollment window is now open from November 1st through January 16, 2024.

Rules For Home Office Deductions

If you have a business and work out of your home, the IRS allows you to deduct certain expenses on your return. Here are a few key things to keep in mind:

The IRS requires you to use your office (or a part of your home) for “regular and exclusive use.” The part of the house should be your principal place of business, a place where you meet customers, or a separate structure dedicated to the business, like a garage or studio.
To calculate your deduction, you can use two methods:
1)The simplified choice allows you to multiply the allowable square footage of your office by $5 up to a maximum of 300 square feet.
2)The regular method allows you to specifically calculate the actual expenses like rent, mortgage interest, taxes, repairs, depreciation, and utilities you pay for the portion of your home used for the business. You must determine the percentage devoted to business activities if you use only part of a space for your business.

^{*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.}

^{Tip adapted from IRS.gov}

Beware Of Imposter Scams

Scammers often pose as businesses or people you know — like your bank, utility company, phone provider or even a friend or relative. They may ask you to send funds to yourself or others using online or mobile banking. They may spoof legitimate phone numbers to call or text you to make the request more convincing.

How to help protect yourself:

Be cautious if being pressured to respond immediately - this is what scammers want you to do.
Be wary of unfamiliar calls, computer messages, texts or emails requesting money or personal information - it's not always who it says it is.
Verify you are sending to a trusted recipient by calling a trusted or verified phone number from a recent bill, receipt or by visiting an official website.
Don't share codes based on a call you receive.

How many cubic yards of dirt are in a hole 9' deep, 8' long, and 1' wide?

___________

Last Month's Riddle: Hannah went to a local hardware store to buy some small items. One would cost $2, two would run $4, but buying 122 would only cost $6. She purchased 122, yet she was not buying in bulk; she could carry what she bought with one hand. What did she purchase?

Answer: Hannah purchased house numbers "1", "2", and "2".