Happy New Year – 2021! Now, Let’s Discuss Taxes!

The IRS has increased exemptions for 2021, which could be helpful to you. Specifically, the federal estate tax exemption has increased to $11.7 million (up from $11.58 million in 2020.) This is the amount you can transfer at your death or (as a lifetime credit) transfer as a gift during your lifetime (less gifts you have already made). As this tax exemption sunsets at the end of 2024 and returns to 2017 exemption amounts ($5.49 million), the current exemption presents an estate planning opportunity for you.

The annual gift tax exclusion amount remains $15,000 in 2021.