Wealthy taxpayers who have incomes above a certain threshold should be aware of some basic tips for shifting incomes and minimizing the hit of taxes. One popular technique for addressing this concern is to gift assets to cousins, grandchildren, or other relatives. This is known as the gift tax exclusion, but in order to get the most out of it, you need to know the limits and how it affects your estate.
One other option is a family limited partnership. In this scenario, the money is moved to others more indirectly, but as a result of the relatives either performing routine tasks or an outright act of bequeathing the gift.
Of course, your individual strategy will depend on your unique needs, and you should consult with an experienced estate planning attorney to craft the right strategy for you. Contact our office to learn more about shifting income.