2023 Marcum Year-End Tax Guide

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“But having an estate plan is more than just checking the box that you’ve signed your Will.”

II. From “I do” to “I don’t”

c. Liability for Joint Returns. If you file a joint tax return, you are jointly and severally liable for all representations on the return. d. Dependency Exemptions. Who will claim your children as dependents? Everyone should have an estate plan and update that plan every five years or more often with any life changes. But having an estate plan is more than just checking the box that you’ve signed your Will. Are your beneficiary designations up to date? If you have a life partner, have you provided for them? What about your partner’s children who you did not adopt? A. Gestational Surrogacy. If you are considering pursuing gestational surrogacy, you may wish to look into your state’s laws on this matter. Some states, like New York, have adopted protections for surrogates to make healthcare decisions as needed and provide compensation to surrogates. III. Why You Need a Plan

B. Pet Trusts. If you are especially fond of your pet, you may want to consider including them in your estate plan through a pet trust, which allows you to provide funds for your pet’s care and name a caretaker. C. Health Care Directives. Health Care Directives are also essential, especially for modern families. Healthcare providers may not speak with those who are not the spouse without proper documentation. For same-sex couples in some states, you may be required to show proof of marriage. The Modern Family faces many challenges the law does not anticipate or provide for. The key for the Modern Family is planning, planning, planning.

When negotiating a divorce or settlement agreement, couples should consider the following: a. Child Tax Credits. Lawmakers are debating how to reform the child tax credit. Currently, the credit is $2,000 per child for a taxpayer with less than $200,000 of income (or $400,000 if married filing jointly). While this may provide an avenue to give the credit to the spouse with a lower income in exchange for a break elsewhere, under current law, the credit will automatically decrease in 2026 to only $1,000 per child, which phases out for taxpayers with $75,000 or more of income ($110,000 if married filing jointly). b. Filing the Final Tax Return. How will you file your final income tax return as a married couple after the divorce is finalized (i.e., married filing joint or married filing separate)? Which accountant will prepare the return? Who will pay for the preparation of the return? All of these questions should be considered during the settlement.

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