Is There A Florida Estate Tax?

Here’s an example that might make this even more clear:

Say your estate is valued at $21.2 million and you’re not married. You can subtract the federal tax exemption of $12.9m, which leaves you with a taxable estate of little over $8.3m. Considering you fall in the highest bracket, you’ll have to pay $345.8k in base taxes.

Then, you can deduct the previously paid tax of $1 million, leaving a remaining taxable estate of $7.3 million. 

Applying the 40% tax rate to this remaining amount results in an additional tax of $2.92 million. Combining the base payment and the additional tax, the total federal estate tax for this scenario amounts to $6.24 million.

Inheritance And Gift Tax

In addition to a non-existent Florida estate tax, there’s also no inheritance tax. However, if you emigrated from another state, you may owe that state inheritance taxes. For instance, Pennsylvania inheritance tax also applies to citizens who moved out. 

Moreover, Florida does not have a state gift tax either. The federal gift tax exemption was $17,000 in 2023. 

If you exceed this annual gift limit to one person in a year, it counts against your lifetime exemption of $12.92 million. It's essential to stay informed about both state and federal regulations to ensure compliance with gift and inheritance tax laws.

Is Florida Still A Low-Tax State?

Absolutely, and this will likely stay true for the foreseeable future. 

The Sunshine State offers various financial benefits to residents, including the absence of a Florida estate tax. No state income tax also sees to it that income, Social Security, retirement accounts, and pension plans remain untaxed. This alone makes Florida a tax-friendly state for retirees, helping save a substantial portion of their income. 

In terms of sales tax, Florida imposes a state sales tax rate of 6%, and when factoring in local sales taxes, the overall average reaches 7.01%. While there is a sales tax, it is important to note that the lack of a state income tax can offset this for most residents.

When it comes to property taxes in Florida, they're within the national average at an effective rate of 0.80%. This places the state in the middle ground nationwide, contributing to the overall affordability and tax-friendly environment that attracts individuals and businesses to call Florida their home.

Safeguard Your Estate

In closing, there hasn’t been a Florida estate tax since 2004, but there are other federal taxes that may apply to your estate after you pass away.

Regardless of the size of your estate, proper estate planning is essential to ensure its proper management and prevent your heirs from dealing with a significant tax burden. This is why you should take proactive steps and seek professional guidance.

Estate planning attorneys at the Law Offices of Mary E. King can assist you in safeguarding your estate, providing for your beneficiaries and mitigating any potential tax burden on your assets. As one of the most effective tax and estate planning professionals in Florida, working with us is your best option if you want to make sure that your estate plan is completely without flaw. 

Schedule an appointment by calling 941-906-7585 or filling out our contact form.

Note: 

The information in this blog post is for reference only and not legal advice. As such, you should not make legal decisions based on the information in this blog post. Moreover, there is no lawyer-client relationship resulting from this blog post, nor should any such relationship be implied. If you need legal counsel, please consult a lawyer licensed to practice in your jurisdiction.