Happy New Year – 2019 Estate & Gift Tax

Happy New Year!

Now, time to talk taxes!  The 2019 tax changes are:

  • The Estate and Gift tax exemption rate is increased (adjusted for inflation) to $11.4 Million per individual in 2019.  This is an increase from $11.18 Million per individual in 2018.
  • Planning together, in 2019, married couples can transfer a total of $22.8 Million in inheritance or gifts without paying gift or estate tax (subject to prior use of the credit).
  • The annual gift exclusion amount is unchanged from 2018.  It remains at $15,000.

Remember, the tax law that ushered in these increased Federal Estate Tax exemption amounts expires at the end of 2025.  Talk with your accountant or attorney to see if you could benefit from taking steps before 2026 to utilize the tax exemption.

New Tax Law

Happy New Year!

We have some big tax changes. Highlights of the new tax law’s impact on your estate planning:

  • Federal Estate Tax:
    o The federal estate tax exemption amount has doubled. In 2018, each individual has a $11.2 Million exemption amount. This is double the 2017 exemption of $5.49 million per person.
    o As with recent years, the federal estate exemption amount will continue to be adjusted annually for inflation.
    o Portability remains. This means in 2018 a married couple can collectively pass $22.4 Million without Federal Estate Tax.
    o The stepped-up basis remains.
    o The top federal estate tax rate, on transfers more than the exemption amount, remains 40%.

 

  • Gift Tax:
    o The gift tax lifetime exemption amount has similarly doubled, now at $11.2 Million per person as well.
    o In 2018, the annual gift tax exclusion is $15,000 per person, an increase of $1,000 from 2017. The annual exclusion will continue to be annually adjusted for inflation.

 

  •  Generation Skipping Tax (“GST”)
    o The GST has also doubled in 2018, to $11.2 Million per person.

But note that under the new law, on January 1, 2026, these increases will all revert back to 2017 amounts.

With these significant changes in tax exemptions, it’s a good time to pull out your estate planning documents and review your plan. If your estate benefits from these exemption increases, you will want to evaluate whether to make gifts prior to the 2026 return to 2017 amounts.

It is also a good time to make sure your documents reflect your current intentions. In additional to reviewing who are the beneficiaries of your estate, review all of your decision makers. Include your incapacity documents in this review (Power of Attorney and Health Care Representative) and make sure you still have the correct persons named.

Happy New Year!

With 2016 only a few hours away, here’s a look at changes to the Federal estate and gift tax exemptions for 2016.

  • The Federal Estate Tax Exemption amount will be $5.45 million per individual, an inflation-adjusted increase from $5.43 million in 2015.
  • The annual gift tax exclusion amount remains at $14,000, the same as in 2015.

The increase in the Federal Estate Tax Exemption means an individual can leave $5.45 million to her beneficiaries without Federal Estate Tax, or gift tax during her lifetime. In 2016, a married couple will be able to collectively transfer $10.9 million without Federal Estate Tax, or gift taxes during their lifetimes.

Happy New Year!

IRS 2015 Gift and Estate Tax Exemption Amounts

The IRS announced the 2015 Gift and Estate Tax Exemption Amounts, along with other tax changes, here.  For persons dying in 2015, the Federal Estate Tax exemption amount has increased to to $5,430,000, up from the 2014 exclusion amount of $5,340,000.  This means that, collectively,  in 2015 a married couple can exclude $10,860,000 from Federal Estate Tax.  The gift tax annual exclusion amount remains $14,000 in 2015.  This means that in 2015, as in 2014, you can transfer up to $14,000 per individual without the necessity of filing a Gift Tax Return.