The estate tax has become a new problem for small business firms. There was lapse of estate tax at the end of 2009. Unfortunately, it will boost up from 0 to 55 percent during 2011. The estate whose value is more than $1 million have to pay estate tax. It means that beneficiaries should pay 55 percent in federal taxes if the estate’s value is more than $1 million. According to many of the small and family-owned businesses, they come in the range and that could be diminished if the lawmakers do not make any adjustments, as the tax exemption will start at $1 million.
There was an increase in exemption amount over the past several years by legislators. Until the tax was non-existent this year, there was also rollback in the tax rate.
Some of the small business owners and farm owners believe that the estate tax would become death tax for them. It is very difficult for the family-owned businesses and farms to pay estate tax.