Difference between Pennsylvania Inheritance Tax and Estate Taxes: An Inheritance Lawyer Explains
When you are planning for your future and creating a will or caring for an aging loved one, you may have questions about Pennsylvania inheritance tax and estate taxes and what they mean. In some situations, the terms can be used interchangeably. However, in most cases they will mean 2 different things.
Estate tax is the tax on the total amount of a deceased person’s entire estate after any debts are paid but before any beneficiaries receive their inheritances. Funeral expenses are taken out of this amount and then the federal government will take out a percentage dependent on the amount of money and location of the estate.
Inheritance tax occurs when heirs or beneficiaries receive money or property from a deceased person’s estate. The Pennsylvania tax is levied according to the person’s relationship with the deceased person and can be up to 15%.
Not all states have inheritance tax policies in place but many do, including Pennsylvania, which could mean the estate is taxed twice – once by the state and then again by the federal government.
Contact a Pennsylvania Inheritance Tax Lawyer
If you have questions about how Pennsylvania inheritance tax may come into play when planning a will or trust, contact an inheritance lawyer today for assistance – 1-610-933-8069.
References:
http://www.nolo.com/legal-encyclopedia/state-inheritance-taxes.html
http://money.howstuffworks.com/personal-finance/personal-income-taxes/inheritance-tax1.htm
