CLH HEADLINES

Favorable estate and gift tax provisions are set to expire at the end of 2025.

Tax planning for this expected sunset is a must.

OVERVIEW: ESTATE AND GIFT TAX EXEMPTIONS

Among other provisions, the TCJA provided 10 years of tax relief by almost doubling the estate and gift tax exemptions from its previous levels, adjusted each year for inflation. These elevated exemptions are set to expire and be reset in 2026:

INDIVIDUALS

2017: $5.5 million
2024: $13.6 million
2026: estimated $7 million, adjusted for inflation

MARRIED COUPLES

2017: $11.1 million
2024: $27.22 million
2026: estimated $14 million, adjusted for inflation

INHERITANCE TAX RATES

Inheritance tax rates are progressive and are not scheduled to sunset:

Taxable estates of $1-10,000: start at 18%
Taxable estates over $1,000,000: 40%

Estate planning starts NOW!

DOES THIS REALLY AFFECT ME? ESTATE PLANNING ESSENTIALS

Theoretically, yes, everyone IS affected. Regardless of individual age or estate value, everyone should have an estate plan.

ESTATE PLANNING CONSIDERATIONS

Do you want specific assets to go to specific individuals?
Do you want the state to decide who receives your assets?
Do you want someone to be able to handle your financial affairs if incapacitated?
Do you have specific guardians in mind for the care of minor children?
Do you want to minimize costs to your heirs?
Do you have medical directives your heirs should be aware of?

ESSENTIAL ESTATE PLANNING DOCUMENTS

Regardless of an estate’s value, we recommend everyone plans for their estate:

Preparing wills and possibly establishing a living trust
Designating beneficiaries on life insurance policies and retirement income plans
Determining power of attorney and designating individual(s) to handle financial affairs
Establishing advance healthcare directives
Appointing guardians for the care of minor children
Other considerations, as applicable

Preparing these documents and making these decisions for the first time is just the first step.

It’s important that these plans and documents be periodically reviewed and adjusted as major life changes occur.

If you don’t plan, someone else will.

STRATEGIC PLANNING FOR TAXABLE ESTATES

If you have a taxable estate over $7 million, it’s time to do some additional strategic planning. Under reduced exemptions, some estates will become taxable and others will be subject to a considerable tax increase due to the reduced exemptions and could substantially decrease the value of your estate.

COMPARATIVE EXAMPLE

Let’s look at an example showing the difference between the current and projected estate tax exemption limits. A married couple makes advanced gifts to reduce the taxability of their estate:

As some states also have estate tax with varying exemption levels, estate planning should also take into account an impact on the state level.

PLANNING WITH PROFESSIONALS

Start your estate planning with the appropriate professionals. It is recommended to contact professionals as soon as possible to begin estate planning, as their services will be in high demand and their time will become even more limited.

CPA
Attorney
Investment advisor
Business valuation analyst
Others important to your estate planning, such as family or heirs

KEY PLANNING POINTS

What might be some of the first steps you and your professional services team do to plan for your estate?

Value assets at fair market value
Determine assets that will have significant appreciation
Conduct financial planning and cash flow analysis to best determine how to maintain lifestyle

Employ strategies to leverage inheritance funds:

Take advantage of higher exemption now
Use the gift tax exclusion of $18,000 (individuals, 2024) / $36,000 (married, 2024) to one (1) individual. Easiest way? Give direct cash gifts.
Gift low basis, appreciated stock to charitable organization or charitable donor fund
Set up one or more irrevocable trusts and transfer assets to the trust (note: this approach will vary based on individual facts and circumstances)
Set up a charitable trust and transfer assets to the trust

“CLAWBACK” CONCERNS

Isn’t there a risk that completed, tax-free gifts made at the higher, more favorable exemption levels will become taxable or “clawed back” if the exemption level later decreases? We have good news for you: No. The IRS adopted an “anti-clawback” rule stating that completed gifts that made before January 1, 2026, and were tax-free, will not be “clawed back” or subject to tax.

CLH, CPAs & Consultants recently expanded their administrative team, adding Audrey Cable and Audrey Byers to their Michigan City and La Porte offices, a move designed to strengthen its organizational core by onboarding fresh operational talent.

Audrey Cable

Audrey Cable comes to CLH with a background in operational and sales experience in the automotive industry. She considers herself a go-getter who is always up for a challenge. Audrey, who graduated La Porte High School in 2019, is applying her existing skill sets in new ways at CLH’s Michigan City office in the role of Front Office Coordinator. She leverages her outgoing personality to cultivate connections with clients and colleagues alike.

Audrey Byers

Audrey Byers is serving in the same role, but at CLH’s La Porte location. A 2023 graduate of New Prairie High School, Audrey is now pursuing a business degree at Ivy Tech. She has a background in customer care in the retail and veterinary industries and enjoys volunteering with a foster care support program to raise funds for Benchmark Family Services in Mishawaka. She finds her introverted nature helps her remain in tune with client and team member needs.

“We’re thrilled to welcome Audrey Cable and Audrey Byers to our growing administrative team,” said Gretchen Kalk-Castro, CPA and Partner at CLH. “At our firm, we don’t just hire employees, but the whole person. We’re excited about the fresh perspectives they bring to the table.”

Kylee Fraze Norman, CPA and Partner at CLH, agreed. “Our firm is committed to fostering the next generation of leaders in all roles. By investing in Audrey C. and Audrey B.’s development, we aim to prepare them for today’s challenges and empower them to shape the future of CLH,” she remarked.

CLH’s administrative team is tasked with keeping the firm’s operations efficient. Administrative staff assist with a wide range of responsibilities, including managing client inquiries, providing clients with deliverables, executing signatures on essential documents, and supporting their respective office teams.

Congratulations to Katy Dibkey, recognized as July’s 2024 R.I.K.I. Spotlight Award winner!

The R.I.K.I. Spotlight is a monthly, team member-nominated recognition program to honor staff members who emulate CLH’s core values (relationships, integrity, knowledge, and innovation). We’re proud to celebrate our team members who exemplify the values that keep our organization grounded and centered.

Congratulations to Sue Armstrong, recognized as June’s 2024 R.I.K.I. Spotlight Award winner!

Congratulations to Jordan Sheets, recognized as May’s 2024 R.I.K.I. Spotlight Award winner!

Visa & Mastercard settled a class action lawsuit claiming business owners were charged excessive fees to accept credit card payments between 2004-2019.

Claimants will share in the distribution of a settlement fund of $5.54 billion, pro rata on all claims filed.

Claims exclude consumers who solely used Visa / Mastercard as forms of payment.

Claims need to be timely filed by ~~May 31, 2024~~ August 30, 2024 (extended as of May 14, 2024).

CLH can file a claim on behalf of existing clients.

Interested to have CLH file your claim? Learn more.

Congratulations to Joanna Warnke, recognized as April’s 2024 R.I.K.I. Spotlight Award winner!

Northwest Indiana accounting firm CLH, CPAs & Consultants isn’t wasting a single opportunity to build its talent pipeline and is starting its outreach efforts early. At a recent career expo event hosted by Michigan City Area Schools, CLH was actively engaged with students as young as sixth grade. Their goal was to show the students that high-quality careers in accounting are a promising option for their futures and they don’t have to fit a mold to find a rewarding career in the accounting field.

Exposure to various career pathways is one of the most empowering experiences that employers can provide for young people. Awareness can be the key determining factor later in life when students are making decisions about their professions.

“There’s a common misconception that accounting is a stuffy or boring job and that couldn’t be further from the truth. We want to show students what it’s really like in our industry. At CLH, we aim to support our team in pursuing career paths that are fulfilling and challenging and we also want to see them live life to the fullest,” commented Stephanie Russell, CLH Human Resource Manager. She continued, “We aim to provide our team with the flexibility to participate in all of the activities they enjoy outside of the office, like volunteering, being active in the community, spending time with their families and friends, traveling, or anything else that leads them to a true work-life balance.”

Stephanie Russell and CLH interns Colin Flanigan and Matthew Flanigan attended the inaugural MCAS 6th Grade College and Career Expo to represent careers in accounting. Using a creative approach, the team shared about the wide variety of careers available in accounting, including public accounting, forensic accounting, and managerial accounting, among others.

Nearly 500 sixth grade students from Michigan City Area Schools attended the event at Lake Hills Elementary School to learn about the many different career and college paths available to them. Over 40 colleges and businesses were in attendance as well.

The primary event organizer was Kristi Davis, MCAS K-12 Coordinator for Counseling and Support Services. Both Davis and Russell are members of the Michigan City Chamber Education Committee, which focuses on MCAS Career and Employer Connections. The committee’s goal is to connect employers and educators to collaborate on the best ways to educate students on available opportunities and prepare them for successful careers.

CLH, CPAs & Consultants is proud to announce it has added Ryan Womack to its expanding administrative team. The company has experienced significant growth over the last few months with the promotion of new directors and the addition of highly skilled professionals, and is now strengthening the core of the organization by onboarding fresh operational talent.

Ryan Womack is currently enrolled as a student at Indiana Wesleyan University. She has a passion for project-based work, business acumen, and maintaining great customer service and those are helping her to become more rooted in her role on the administrative team in the firm’s Valparaiso office.

“CLH strives to identify each team member’s unique skills and looks for opportunities for our team to maximize those skills in their career. Now that Ryan has joined our administrative team, we’re excited to support her growth in her role,” remarked Gretchen Kalk-Castro, CPA and Partner at CLH.

Angela Grothaus, CPA, CVA, and Director at CLH, added, “We provide professional education and on-the-job training to help each employee reach their goals.” She continued, “We want each person to have a fulfilling career at CLH and we take pride in offering these types of opportunities to our entire team to help them advance in knowledge and technical abilities.”

At CLH, the administrative team oversees operational activities that keep the business running smoothly. Duties include effectively handling client inquiries, assembling client deliverables such as income tax returns, preparing filing instructions to ensure a seamless client experience, assisting clients with signing critical documents, maintaining electronic files, and supporting the professional team with a wide range of assistance.