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Glossary of Terms Page 8

A retirement savings plan
(like an IRA, 401(k), pension, profit sharing, or
Keogh) that qualifies for special income tax
treatment. The contributions made to the plan and
subsequent appreciation of the assets are not taxed
until they are withdrawn at a later time —
ideally, at retirement, when your income and tax
rate are lower.
Generally, a gift of more than $15,000 in one year to someone other than your spouse. The value of the taxable gift is applied to your federal gift tax exemption. After you have used up your exemption, additional gifts will be taxed, usually at the highest estate tax rate in effect. In 2020, the gift tax exemption is the same as the federal estate tax exemption (currently $11,580,000) and the top tax rate is 40%.



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