Tax season is over! While you breathe a sigh of relief, also know that the refund fairy has been extra generous with taxpayers’ bank accounts. Hopefully you fall into that category as well. According to the latest IRS data, the average income tax refund for this season stands at $3,011, marking a $123 increase from last year. A significant majority, two out of three taxpayers, anticipate receiving a refund.
But tax day is not just about refunds – it is a day to lament and pay homage to all the different taxes that make the world go round. According to Albert Einstein, “The hardest thing in the world to understand is the income tax.” Here are American and Floridian taxes you should know about as well as 7 WEIRD taxes that you can file away in the useless facts compartment of your brain. You might even learn something for next tax season.
Florida Taxes:
- Florida does not impose a state income tax on its residents, relying instead on other revenue sources such as sales taxes and property taxes. This tax policy has been in place since 1855. Why, you ask? First, Florida’s economy thrives from its status as a popular tourist destination, which generates substantial revenue. Second, the state’s rapidly growing population contributes to a larger tax base, alleviating the need for income taxes.
- Florida also does not impose an estate tax, primarily due to its appeal to retirees and high-net-worth individuals. This attracts wealthy residents seeking favorable tax environments for estate planning. Additionally, Florida’s reliance on alternative revenue sources such as sales taxes and tourism-related income enables the state to forgo estate taxes without significant revenue loss.
These tax breaks coupled with the white sandy beaches, air boats rides through the Everglades, Cuban sandwiches and Cafecito is enough to lure anyone to Florida.
Federal Estate Tax:
- The federal estate tax in the United States is a tax levied on the transfer of a deceased person’s estate to their family (called their heirs). But it only applies to the value of the estate above a certain dollar value (called the federal estate tax exemption), which changes periodically due to legislative updates. As of January 1, 2024, the federal estate and gift tax exemption amount increased from $12.92 million to $13.61 million per individual (a combined $27.22 million for a married couple), representing an increase of $690,000 from last year.
- For estates exceeding the exemption amount, tax rates range from 18% to 40%. Estate tax returns are generally required within nine months of the individual’s death. Various estate planning techniques, such as trusts and lifetime gifting, can be employed to mitigate paying very high estate taxes.
NOW, FOR THE CRINGE WORTHY TAXES AROUND THE WORLD
Japan’s Fat Tax – In Japan, there is a law known as “metabo,” which requires companies and local governments to measure the waistlines of citizens aged 40 to 74 as part of their annual checkups. This tax is aimed at reducing obesity and healthcare costs.
Denmark’s Bike Tax – Denmark has a tax on bicycles with an engine capacity exceeding 50cc. This tax is meant to discourage the use of motorbikes and promote environmentally friendly transportation.
Germany’s Church Tax – In Germany, members of recognized religious groups, such as Catholics and Protestants, must pay a church tax (Kirchensteuer), which is automatically deducted from their income tax. It is a tax additional to income tax and is forwarded by the tax office. The taxation rates vary from 8% to 9% of your income tax, depending on the state. The tax funds the activities of the respective religious institutions. If you are not part of those churches, you do not pay church tax.
Uganda’s Social Media Tax – In 2018, Uganda implemented a controversial tax, commonly referred to as the “social media tax” (OTT tax), on the use of social media platforms like Facebook, WhatsApp, and Twitter. Ugandan citizens are required to pay a daily fee to access more than 50 platforms social media platforms, ostensibly to raise revenue but also criticized as a means of stifling dissent and controlling information flow.
Ireland’s Artist exemption – If you are a starving artist in Ireland, you will go a little less hungry under the Artist Tax Exemption on your income taxes. In an effort to expand the field of fine arts, income earned by writers, composers, visual artists and sculptors from the sale of their works is not taxed, under certain circumstances. Artists must file a claim with Revenue Commissioners, who determine whether the work is original, creative, and has cultural or artistic merit. It also must fit within the five following categories: books or other forms of writing, plays, musical compositions, paintings or other similar pictures, and sculptures. The Artist Tax Exemption will only apply to income up to €50,000 annually, which is equivalent to $53,043 USD.
In 1789, Benjamin Franklin told a colleague that the newly adopted United States Constitution “has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.” Indeed, death and taxes are inextricably linked together in our legal system, so much so that even after a person dies their estate may still need to file multiple tax returns. For a free legal consultation to help you start planning for the future, contact OC Estate and Elder Law at (954) 251-0332 or info@ocestatelawyers.com to get started with your free consultation in estate planning. Our attorneys are fluent in English, Spanish and Russian.
