Everything You Should Know About Inheritance Tax

  Most people have heard about estate tax--the federal tax on estates valued at more than $5.45 million in 2016. What fewer people realize is that this estate tax is not the same as an inheritance tax. Estate taxes are taken directly out of the estate before beneficiaries receive anything. It is a tax on the person who has died, not the income being received by the beneficiaries (even though the ultimate effect may be the same). Inheritance tax, on the other hand, is a tax on the income received by beneficiaries. It is taken out of the portion of the estate each beneficiary receives. Unlike estate tax, there is no federal inheritance tax. What you inherit should not be [...]