Do Beneficiaries Pay Massachusetts Taxes On Bank Accounts?
Posted On: Thursday, February 3, 2022
When a bank account is inherited, it’s important to understand the potential tax consequences.
Each state has specific regulations in place, which include what taxes are owed on the account once it is passed to the beneficiary.
It’s important to note, there could also be federal taxes due upon transfer. Here we will take a deeper look at what taxes could be owed in the state of Massachusetts and what to consider during the process.
$1,000,000 exemption
The first item to discuss is the limit that is set in place for taxation in the state of Massachusetts.
An estate is only subject to taxation if the total value of the inherited estate exceeds $1,000,000. This means there is no tax on inherited bank accounts that are included in an estate that is less than $1,000,000.
For Massachusetts estates that are above this limit, the entire estate is subject to taxes (not just the portion in excess of $1,000,000).
The estate tax rates in Massachusetts are progressive, ranging from 0% to 16% based on the size of the estate. Amounts exceeding $10.04M are taxed at the maximum rate of 16%.
To learn more about Massachusetts estate taxes, reach out to the team at Rakatansky, Rakatansky & Associates.. A specialist will be more than happy to discuss your inherited estate and any potential tax effects.
The founding partner of the firm, Ira Rakatansky, is a tax attorney who has over 50 years of experience specializing in all areas related to estates and estate taxes.