Worried about the tax implications of estate planning for your business? You're asking the right questions, and we're here to help you understand exactly what this means for your family and business future. The truth is, estate planning tax deductibility isn't a simple yes or no answer—especially for business owners in Brooklyn and Queens who want to protect what they've worked so hard to build.
Here's what you need to know right now: the federal estate tax only kicks in for estates over $13.61 million. That means most families we work with in Bay Ridge, Astoria, and throughout our Brooklyn and Queens communities won't face this particular tax burden. But that doesn't mean you can skip planning—quite the opposite.
The Tax Cuts and Jobs Act of 2018 changed everything. Before this law, you could potentially deduct certain estate planning expenses if they exceeded 2% of your adjusted gross income. Those days are gone. Most estate planning fees are no longer tax-deductible for individuals, and you generally can't deduct legal fees for personal estate planning from your income taxes.
But here's where it gets interesting for business owners like you. When your estate planning involves managing income-producing property or investments or focuses on business succession planning, you might still qualify for valuable deductions. We've helped countless business owners from Williamsburg to Forest Hills take advantage of these opportunities.
We promise to walk you through every detail of estate planning deductions with the care and attention your family deserves. Whether you're running a family business or managing investment properties, we're committed to explaining exactly which costs remain deductible, how to structure your plan for maximum tax benefits, and what changes are coming in 2025 that could affect you and your loved ones.
❓ What does the IRS say about deducting estate planning fees?
The IRS doesn't mince words when it comes to estate planning deductions. Their guidelines are crystal clear, and the changes affect every family we work with—from Flatbush to Sunnyside—who want to maximize their tax benefits while protecting their legacy.
Are estate planning fees tax deductible for individuals?
Here's the hard truth: the Tax Cuts and Jobs Act of 2017 eliminated most estate planning fee deductions for individuals. Before this law changed everything, certain estate planning fees qualified as itemized deductions on Schedule A as miscellaneous deductions. You could deduct expenses related to income production or tax advice if they exceeded 2% of your adjusted gross income.
That opportunity is gone. Whether you're a small business owner in Park Slope or a property investor in Kew Gardens, most individuals simply cannot deduct estate planning fees as miscellaneous itemized deductions on personal tax returns anymore. These restrictions stick around until at least the end of 2025.
What are the exceptions for business-related deductions?
Business succession planning tells a completely different story. While your personal estate planning fees won't save you tax dollars, business succession planning costs can still provide real tax benefits.
Own a brewery in Williamsburg? Run a restaurant in Astoria? Your expenses for transferring business assets or protecting your business operations may still qualify for deductions. Tax advice and preparation fees related to estate taxes, plus investment advisory fees that impact your estate's investment strategy, might also be deductible. The key difference is simple: when your estate planning directly connects to your business operations or income production, opportunities still exist.
How does the IRS define income-producing expenses?
The IRS keeps it straightforward. Expenses count as "income-producing" when they directly relate to generating or managing income. This means:
• Costs for production or collection of income • Management of income-producing property
• Tax advice related to income generation
Got rental properties in Jackson Heights? Own commercial real estate in Cobble Hill? Fees for setting up trusts to manage these income-generating assets might qualify for deductions. Planning to minimize taxes on your estate's income can create deduction opportunities too.
The bottom line: personal costs get treated differently than expenses tied directly to income production. For Brooklyn and Queens business owners planning their estates, this distinction makes all the difference.
📌 Which estate planning costs are deductible for business owners?
Good news for Brooklyn and Queens business owners—several estate planning deductions remain available despite recent tax changes. Your trust means everything to us, and we want you to know exactly which costs you can still write off as you plan for your family's future.
Can you deduct legal fees for business succession planning?
Yes—and this is where business owners have a real advantage. Business succession planning fees remain fully deductible. When you're planning who will take over your Bay Ridge bakery or Astoria hardware store, these expenses directly benefit your company's future.
The IRS allows deductions for "ordinary and necessary" business expenses, which include: • Mapping out leadership transitions • Creating buy-sell agreements
• Legal fees for transferring business ownership assets
You can claim these deductions directly on your business tax return—whether that's Schedule C, partnership return, or corporate return. We've helped many business owners take advantage of this opportunity.
Are trust administration fees deductible?
Certain ongoing trust administration fees can be deductible, especially those related to income-producing activities. If your trust manages properties in Forest Hills or investments in Brooklyn Heights, you may deduct trustee fees and investment advisory fees.
Here's what matters: expenses paid for administration of an estate or trust that wouldn't be incurred if the property weren't held in such arrangements are deductible. These deductions typically apply to the trust's tax return rather than your personal return.
What about accounting and appraisal costs?
These costs often qualify for deductions when connected to income production. As a Bushwick business owner, you'll appreciate that these essential services don't lose their tax benefits.
Deductible expenses include: • Appraisal fees to determine fair market value of assets • Trust tax return preparation • Distribution-related costs • Tax preparation fees for generation-skipping transfer tax returns • Fiduciary income tax returns • The decedent's final individual return
Can you deduct fees for managing rental or investment properties?
Absolutely! If you own rental properties across Flatbush or Flushing, numerous expenses remain deductible. You can write off CPA fees, legal costs for rental paperwork, real estate agent commissions, advertising expenses, and advisor services related to your properties.
These expenses are considered operating costs and should be deducted accordingly. After working hard to build your property portfolio, you shouldn't have to worry about losing these important tax benefits.
🗽 What should New York business owners know about 2025 tax rules?
Your business in Astoria or Park Slope faces some unique estate planning considerations that most other states don't impose on their residents. We've been helping New York families since 1996, and we know exactly how these state-specific rules can impact your family's future.
How does New York state treat estate planning deductions?
New York doesn't make things easy for families like yours. The state maintains its own estate tax system with an exemption of just $7.16 million for 2025—much lower than the federal level. What's even worse is New York's "cliff effect." If your estate exceeds the exemption by more than 5%, your entire estate becomes taxable, not just the excess amount.
We've seen this catch families off guard time and time again. Plus, New York has a three-year "look-back" period for gifts, meaning certain gifts made within three years of death get pulled back into your estate. Your hard work building that family business shouldn't be penalized because of complicated state rules.
Will the Tax Cuts and Jobs Act expire or change in 2025?
Here's what's coming that you need to prepare for: The TCJA provisions are scheduled to expire on December 31, 2025. Without congressional action, the federal estate tax exemption will drop from $13.99 million in 2025 to approximately $7 million per person in 2026.
That's a massive change that could suddenly affect many more Williamsburg restaurant owners and Forest Hills property managers than ever before. After working hard your whole life to build something meaningful, you shouldn't have to worry about losing it to taxes.
What planning should be done before the law changes?
We're committed to helping you protect your Flushing boutique or Bedford-Stuyvesant real estate investments before these changes hit. Here's what you should consider:
• Accelerate wealth transfer strategies before exemptions decrease • Consider lifetime gifts now to lock in current high exemption amounts
• Review your estate plan with professionals to maximize tax benefits
Time matters here. We promise to be there for you, offering our best advice and support, so you can have peace of mind knowing your family legacy is protected no matter what changes come in 2025.
📋 How can you structure your estate plan to maximize tax benefits?
When you've worked hard to build your Ridgewood bodega or Crown Heights investment properties, structuring your estate plan the right way makes all the difference. We're committed to helping you get the maximum tax benefits while protecting what matters most to your family.
Should you separate personal and business planning?
Yes, absolutely. This separation creates clear distinctions between personal and business assets, and it's one of the smartest moves you can make. We've seen how this approach allows our clients to maximize deductions since business-related succession planning remains tax-deductible while personal planning generally isn't.
For your Flatbush retail shop or Sunnyside restaurant, we can help you establish your business as a separate legal entity—like an LLC or corporation. This provides protection for your personal assets while creating clearer deduction opportunities. Your trust means everything to us, and we want to make sure you're getting every advantage possible.
How do you document deductible vs. non-deductible fees?
Keep detailed records of every planning expense—we can't stress this enough. Request that your attorneys and accountants itemize their invoices, clearly distinguishing between personal estate planning and business-related services. As a Carroll Gardens business owner, this documentation becomes crucial during tax preparation and potential audits.
We also recommend maintaining records of any fees related to income-producing activities, as these may qualify for deductions. Our heart is in helping you stay organized and protected, so you never have to worry about missing out on legitimate tax benefits.
When should you consult a CPA or estate attorney?
The best approach? Consult both professionals at the same time. Your CPA brings tax expertise regarding estate and gift tax laws while your attorney handles legal matters like wills and business succession.
For your Kew Gardens family business, this collaboration provides the protection you deserve. A CPA determines expected transfer costs under various options, while attorneys draft the necessary legal documents and evaluate planning options that benefit future generations. We promise to coordinate with your other professionals to ensure everything works together seamlessly.
What are the best tools for high-net-worth individuals?
For substantial estates in Brooklyn Heights or Forest Hills, we can guide you through advanced planning tools like irrevocable trusts. Family Limited Partnerships (FLPs) allow you to maintain centralized control while transferring business interests gradually. Intentionally Defective Grantor Trusts (IDGTs) can remove business assets from your taxable estate.
Generation-Skipping Transfer trusts extend your legacy through multiple generations. Whether you own a Williamsburg brewery or manage a Jamaica real estate portfolio, we're here to implement these sophisticated strategies with the care and attention your family deserves.
Protecting Your Legacy While Saving on Taxes
Estate planning tax rules can feel overwhelming, especially when you're trying to balance protecting your family with managing costs. We understand these concerns, and we're committed to helping you find the right path forward.
Your trust means everything to us, and throughout this guide, we've shown you that while personal estate planning costs generally aren't tax-deductible, meaningful opportunities exist for business owners. Business succession planning fees, trust administration costs, and expenses related to income-producing property management can still reduce your tax burden when structured properly.
The clock is ticking on current tax provisions. With exemption amounts likely dropping substantially in 2026, plus New York's lower exemption limits and "cliff effect," many more Queens and Brooklyn business owners could face significant estate taxes. Your family business or investment properties deserve proactive protection before these changes take effect.
Concerned about what happens to your family when you're gone? The sooner you act, the better positioned you'll be. Whether you own a small business in Bensonhurst or manage rental properties in Elmhurst, separating personal and business planning becomes essential for maximizing available deductions.
Professional guidance makes all the difference. Working with experienced attorneys and CPAs ensures your family legacy receives maximum tax benefits while protecting the assets you've worked so hard to build. Yes, some planning costs might not be deductible—but the long-term savings and peace of mind far outweigh these expenses.
We promise to be there for you, offering our best advice and support as you protect your family's future. After working hard your whole life, you shouldn't have to worry about losing what you've built to unnecessary taxes.
Contact us today to schedule a free consultation. We're here to help you create a plan that protects your assets, minimizes your tax burden, and ensures your family legacy is secure—no matter what changes lie ahead.
