Tax Planning Lawyer for Investments & Estates in Bethesda, Maryland

Estate Planning & Taxes in Bethesda

& Finding a Tax Lawyer for Investments & Estates

Many people invest without considering the tax implications of their decisions. However, tax planning can be a critical tool for maximizing the return on your investment. By considering the tax treatment of different investment vehicles, you can choose the option that will minimize your tax liability. For example, index mutual funds are taxed at a lower rate than actively-managed funds, making them a more tax-efficient choice for long-term investors. In addition, certain retirement accounts offer unique tax benefits that can help you save on your taxes.

Tax planning is also an essential part of estate planning. By considering the many tax breaks available, you can minimize the amount of taxes your family will have to pay upon your death. One way to do this is to take advantage of the annual gift tax exclusion. This allows you to give up to $14,000 per year to each of your children without incurring any gift tax liability. Another way to reduce your taxes in Bethesda is to create a trust fund. Trusts can be used for a variety of purposes, including minimizing estate taxes. When you create a trust, you can designate how the assets in the trust will be used and who will benefit from them. This can help you to keep more of your assets in the hands of your family and less in the hands of the government.

By tending to both tax planning for investments and estates, you can ensure your hard-earned money stays in your pocket. If you have any questions about how to best structure your investments or estate for tax purposes, it is advised to connect with a Bethesda tax attorney.

Tax Implications of Trusts

A trust in Bethesda is a legal entity that can be used to hold and manage assets on behalf of another person. Trusts are often used for Bethesda estate planning purposes, as they can help to minimize taxation and ensure assets are distributed according to the wishes of the trust’s creator. However, considering the potential tax implications of setting up a trust. In some cases, trusts may be subject to income tax, capital gains tax, or estate tax. Trustees may also be responsible for paying annual filing fees to the Internal Revenue Service (IRS), so it is important to consult with a legal expert and tax advisor before establishing a trust.

Beneficiary Designations and Estate Taxes

One of the most important concepts of estate taxes is beneficiary designations. A beneficiary designation is an agreement between you and a financial institution specifying who will receive your designated assets in the event of your death. This includes things like life insurance policies, retirement accounts, and bank accounts. While you are alive, you have the right to change your beneficiaries at any time. However, it’s important to remember that beneficiary designation agreements take precedence over wills and trusts. That means your assets will still be distributed according to your beneficiary designations, even if you have a formal will or trust in place. As a result, it’s essential to keep your beneficiary designations up to date to ensure your assets will be distributed how you wish.

Retirement Account Distributions and Estate Taxes

For many people, retirement savings are one of the most important assets they will ever have. Not only do these savings provide financial security in retirement, but they can also be passed on to loved ones after death. You must understand the tax implications of retirement account distributions and estate taxes, though. If you’re not careful, you could end up paying more in taxes than you need to.

When you take a distribution from a retirement account, you will generally be subject to income tax on the amount withdrawn. However, if you’re over the age of 59 1/2, you can avoid paying this tax by rolling the distribution over into a new retirement account — but you need to make sure this process is completed correctly. If it isn’t, you could end up paying penalties and interest on the rollover amount.

Delia Law Can Help With Tax Planning for Investments and Estates in Bethesda

At Delia Law, we are highly trained and experienced attorneys who can help you with tax planning for investments and estates. We help minimize your tax liability and maximize your deductions. We can also help you plan for retirement, college, and other major expenses that are coming up in your life through the use of trusts, wills, and other estate planning tools. We can help you save for a rainy day, invest in a new business, or protect your assets from creditors. We can also help you plan your estate so that your loved ones will be taken care of after you’re gone. Contact us today to learn more about how we can help you with your tax planning needs.

Maryland-Specific Tax Laws


Maryland has a progressive tax system, which means the higher an individual’s income is, the higher the percentage they will pay in taxes. Maryland has special tax benefits for military retirees, lower income families, those paying for childcare, as well as for those aged 65 and older.

There are four types of taxes in Maryland:

  • State income tax. The state tax rate for personal income tax begins at 2%. This is applied to anyone making under $1,000 per year in annual income. It increases up to 5.75% for anyone making over $250,000 annually. This is one of the lower state income tax rates in the United States.
  • Local income tax. There is also a local income tax, which is levied by counties and cities. For convenience, these are withheld during income tax season by the state, and they vary based on the locality. For example, if you live in Allegany County, you paid a .0305 tax rate in 2021. This differs from residents of Baltimore County, who had a .0320 rate. It is important to note that this income is based on the county you live in, not where you work.
  • Sales tax. With each purchase in Maryland of a good or service, a 6% sales tax is automatically applied. This does not include every purchase. Groceries, prescription drugs, and gasoline are a few examples of items not subject to sales tax. However, a business is required to collect a 9% tax on any alcoholic beverages sold.
  • Property tax. You must pay property taxes in Maryland as well, and the tax rates vary by county. The average effective tax rate is 1.06%. While this might seem low, it is balanced by the high property values in the state. The median home value in Maryland is currently over $400,000 and varies based on proximity to the city of Maryland and other populated areas.
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