As discussed in the last two blogs, the Florida Constitution allows resident homeowners to receive generous homestead exemptions if they qualify for a homestead exemption or reduction through the Florida Department of Revenue. In addition to the homestead programs available for veterans, the disabled, widows and widowers and to all other homeowners, the Florida Constitution allows local government municipalities to enact ordinances allowing their residents to receive additional homestead exemptions of up to an additional $50,000.

The extended homestead program is available to homeowners age 65 or older who permanently reside in their homes. The program sets forth income caps, which are subject to change annually based on consumer price indexes and cost-of-living increases.

Even if your local government does not offer an expanded or additional program or you do not qualify for it, you may be able to qualify for other state tax relief programs, including the Deployed Military Exemption program. This program is available to all actively deployed military service members who own property in Florida. Eligible service members receive property tax discounts based on the length of their military deployments.

Because of the different homestead tax programs offered by local Florida governments and the Florida Department of Revenue, you may want to contact an estate planning attorney to discuss the effects of placing property in trust while benefiting from this program.

Robert J. Kulas, P.A. Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

After reading the first blog entry in this three-part series, you should know that you may qualify for a property tax reduction or complete exemption if you are a completely and totally disabled veteran limited to wheelchair use, a quadriplegic or suffer complete blindness. If you do not qualify for the complete veterans’ exemption, you may qualify for a different homestead exemption through another homestead program.

The state offers blind or disabled widowers and widows a limited exemption of up to $500 each year. Blind widows or widowers must obtain a certificate of eligibility from the Department of Veterans’ Affairs, the Department of Education’s Division of Blind Services or through the local Social Security Administration substantiating their lack of sight.

The state also offers other residents a partial homestead exemption. The partial homestead exemption is available to any resident who owned real property in Florida as of Jan. 1 annually. All homeowners receive up to a $25,000 local tax exemption through the Florida Department of Revenue and another $25,000 exemption for local school and district taxes. Qualified veterans with disabilities affecting at least 10 percent of their bodies or vision suffered through war-related or service-related injuries may qualify for an additional monetary exemption in addition to the $50,000 exemption.

Robert J. Kulas, P.A. Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

Most states impose real property taxes on their residents. In many states, tax agencies impose property taxes on personal property. Additionally, many states, including Florida, offer some homeowners property tax relief programs that allow them to reduce their annual or semiannual real property tax payments.

The Florida State Constitution gives local government tax agencies the legal rights to assess property taxes on local residents to subsidize local community programs and benefits. All Floridian homeowners receive annual property tax bills based on recent assessments conducted by local tax assessors. Florida’s homestead tax exemption programs offer many different types of homeowners the opportunities to reduce their annual real estate taxes.

The largest exemption available to Florida homeowners is the state’s Total Homestead Exemption Program. According to the rules of this program, qualified homeowners can receive a complete and total exemption from property taxes. The total exemption is available to honorable discharged veterans with permanent and total disabilities caused by war-related or service-related injuries. Only veterans with honorable discharge papers qualify for the total exemption.

More specifically, the total exemption is generally available to quadriplegic war veterans, regardless of income and non-quadriplegic, but totally disabled veterans who depend on wheelchairs for mobility or suffer from legal blindness. Non-quadriplegic veterans must meet annual income limits. All first-time filers must submit proof of their disabilities from two independently licensed physicians.

Robert J. Kulas, P.A. Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

While the federal government does impose a gift tax, not every gift is taxable. There are a number of exclusions and exemptions that shield gifts from taxation, and one of these is the annual exclusion.

When you transfer property, including money, to anyone other than your spouse, you can give up to a certain amount each year without having to file a gift tax return, and without that transfer being considered by the IRS for gift tax purposes. For 2011, the annual exclusion amount is $13,000. So, each individual taxpayer is allowed to transfer a maximum of $13,000 to each recipient of his or her choosing, gift-tax free. A married couple can combine their exclusions and give up to $26,000 per recipient.

Why does the annual exclusion not apply to spouses? If your spouse is a citizen of the United States, you’re allowed to transfer an unlimited amount of property to him or her, gift-tax free. If your spouse is not a U.S. citizen, there’s a separate annual limit. For 2011, that limit is $134,000.

It’s important to note that the annual exclusion only applies to gifts of a present interest in property. This means property that is transferred in its entirety to the recipient during the tax year in question. Gifts of a future interest in property, where the recipient won’t get complete ownership and control of the property until some point in the future, don’t fall under the annual exclusion.

Robert J. Kulas, P.A. Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

The general rule when it comes to the federal gift tax is that gifts from one spouse to another are tax-free, under the IRS’s Unlimited Marital Deduction. However, there are two very important exceptions to this general rule.

Non-Citizen Spouse

The first exception is that gifts to a spouse who is not a U.S. citizen are not always tax-free. If you’re married to someone who is not a citizen, then the 2011 rules allow you to give up to $184,000 in gifts to your spouse without filing a federal gift tax return and tapping into your lifetime gift tax exclusion. So, gifts of more than $184,000 to a non-citizen spouse are reportable to the IRS and, depending on your individual circumstances, might be taxable.

Future Interest

The IRS draws a line between gifts of a present interest in property and gifts of a future interest in property. A gift of a present interest in property is one that’s given to a recipient all at one time, with no strings attached. A gift of a future interest in property is one that requires the recipient to wait before receiving the full benefit of the property. For instance, if you take a life interest in a piece of real estate and give your spouse a remainder interest (meaning your spouse gets the house when you pass away), then your gift to your spouse is one of a future interest.

Even if your spouse is the recipient, gifts of a future interest are reportable and taxable.

Robert J. Kulas, P.A. Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

This tax season, there’s a new way to track your tax refund. The IRS has launched IRS2Go, a free mobile phone application that lets you stay up-to-date in three ways:

• After downloading IRS2Go, you can enter your social security number, filing status, and the amount you expect to get back from the IRS, and find out exactly when you can anticipate your refund.
• You can also choose to get tax tips and updates. During the filing season, the IRS will send daily tax tips to your phone. Throughout the rest of the year, you’ll get periodic updates.
• The application also allows you to sign up to follow the IRS on Twitter. Following @IRSnews will give you updates on changes in tax law and keep you informed about important IRS programs.

For iPhone and iTouch users, the IRS2Go application is available through the iTunes app store. If you have an Android phone, you can go to the Android Marketplace to download the app.

For more information about IRS2Go , or about tax laws and regulations, you can visit www.irs.gov.

Robert J. Kulas, P.A. Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

‘Tis the season for IRS scams. Although scammers impersonate the IRS year-round, the frequency of these scams increases substantially during tax season. Most IRS scams are identity theft schemes, in which the scammer poses as the IRS to deceive victims into handing over personal information. The scammers’ goal is to access a victim’s financial information, such as bank account and credit card numbers, passwords, and PINS and social security numbers, for purposes of stealing financial accounts. When it comes to avoiding these scams, the IRS has some recommendations:

Recognizing a Scam

It can be hard to recognize a scam when you’re faced with one. Most commonly, IRS scams happen via email, and they can be sophisticated. Here are some signs to be aware of:

• A request for personal information such as your mother’s maiden name, a bank account or PIN number
• An offer of an incentive in exchange for providing information, like a faster tax refund or payment for taking a survey
• A threat of a penalty,  an increased tax bill, or other trouble if you fail to respond with the requested information
• An email containing a link to a Web site that does not actually belong to the IRS. The real IRS web address is http://irs.gov 
• Errors in spelling or grammar within the email

The Refund Scam

One of the most common IRS scams is the “refund scam,” with which an identity thief tries to steal your personal information by sending you an email promising a tax refund if you’ll fill out a claim form. The claim form is either attached to the email or the email contains a link to the form. Of course, the form requests your personal financial information, which is then stolen.

In recognizing this request as a scam, it’s important to understand that the IRS doesn’t require taxpayers to complete an additional claim form in order to receive a tax refund. If you’re due a refund, it will be sent to you as a result of your filing the appropriate income tax return; there’s no additional paperwork required.

What to Do

So, what should you do if you receive an email that you suspect is an IRS scam?

First, don’t open any attachments. They can contain malware, a malicious program that can infect your computer.

Second, don’t click on any links within the body of the email. A link could contain malware, or it could take you to a false but convincing website designed to get you to provide your personal financial information.

Third, instead of responding to the email, check with the actual IRS. Go to www.irs.gov and access the Where’s My Refund? tool. This will let verify whether you’re due a refund and when you can expect it.

Finally, report the scam to the IRS by forwarding the email to phishing@irs.gov. After you’ve done this, delete the email from your account.

Robert J. Kulas, P.A. Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

With tax season upon us, MSNBC.com recently posted an article highlighting common income tax errors you’ll want to avoid. Here are a few of the highlights:

• Claiming the Wrong Filing Status.  You might think it’s simple to know whether you’re married or single, but for people who are newly married or in the process of a divorce, choosing a filing status can be tricky. And even if you’re married, do you file jointly or separately? Your choice can have significant consequences. A good rule of thumb is to remember that your filing status should reflect your actual status on December 31^st of the tax year in question. And if you’re not sure, you’ll want to check with your tax advisor.
• Forgetting to Sign and Date Your Form. It can be a simple oversight, but when you send in your tax return without a signature, the IRS treats the return as unfiled.
• Failing to Report All Income.  You’re required to report all your income, from every source. This means waiting to file until you’ve received each and every W-2 and 1099. It also means that if you don’t receive one of these forms, you should still report the income.
• Not Filing the Right Form.  You’ll want to check the instructions to ensure that you’re submitting the appropriate form, along with all the necessary schedules and documentation.
• Math Errors. Math errors are becoming less prevalent as e-filing becomes more popular, but they still happen. You’ll want to double-check your return before you file it.

By the way, this year you’ll have a few extra days to double-check your return before you submit it: because of a legal holiday in Washington, D.C., the filing deadline has been extended to April 18.

Robert J. Kulas, P.A. Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

People tend to use the terms “death tax”, “estate tax” and “inheritance tax” like they’re all exactly the same thing. While estate tax and inheritance tax both fall under the umbrella of “death tax”, they’re actually completely different.

Estate Tax

An estate tax is assessed on the value of a person’s estate, as a whole, when they pass away. There’s the federal estate tax – which is scheduled to make a return, in some form, at the beginning of 2011 – and then there are state estate taxes. Only a limited number of states assess an estate tax, and Florida is not one of them.

So, if your estate is large enough to qualify for estate taxation, the exact amount of the tax bill is determined based on the value of the estate, without regard to who inherits what. The estate tax is generally paid out of the assets of the estate.

Inheritance Tax

Instead of looking at the whole estate, an inheritance tax focuses on what each individual inheritor of an estate receives. So, if the inheritor is not exempt from this tax, and the transfer qualifies for taxation, then an inheritance tax is assessed, and the person inheriting is responsible for the bill.

This only applies in certain states, though. There’s no federal inheritance tax, and currently only seven states have an inheritance tax – Florida is not one of them.

Robert J. Kulas, P.A. Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

There has been a lot of talk this year about the estate tax; particularly, about the one-year-only repeal of the tax that took effect for 2010. Uncertainty has prevailed all year on this topic, and not much has changed.

The future of the estate tax rests in the hands of Congress. If Congress doesn’t do anything, then the tax will return starting January 1, 2011. When it comes back, the maximum estate tax rate will be 55%, and the exemption will be $1 million. Compare this with 2009, when the rate was 35% and the first $3.5 million of any given estate was exempt from taxation.

The one thing we know for sure is that Congress won’t do anything until after the summer recess, meaning that there won’t be any legislation on this subject until mid-September at the earliest. Some experts think that there won’t be any action until after the elections, meaning that the uncertainty will continue until very close to the end of the year.

What about the chance of a retroactive estate tax for the year 2010? This was a big concern at the beginning of the year and, although it’s always a possibility, most experts seem to think that the longer Congress waits to take action, the less likely a retroactive 2010 estate tax will be. Of course, Congress can always do whatever it decides.

So, where does all this uncertainty leave us? Anyone who has a net worth of $1 million or more – and this includes the value of your home, your investments, and your life insurance policies – should consult with an estate planning attorney about the need for tax planning.

Robert J. Kulas, P.A. Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.