It's that time of year again...
Not for ghosts and pumpkins (well, those too) - this month, the IRS published the new estate and gift tax exclusion amounts, along with various other tax rate tables. These numbers may or may not vary from year to year, but estate and tax planners are always interested. Minimizing estate and gift taxes can be an important component of a complete estate plan and clients who may make large gifts or whose net worth approaches the estate tax exclusion amount should stay abreast of these changes.
The highlights:
The unified credit against estate tax increases to $5,600,000 per individual in 2018 ($11,200,000 for a married couple utilizing portability). This is a notably steeper climb than in recent years – in 2017, the unified credit was $5,490,000, in 2016, the amount was $5,450,000, and in 2015, the amount was $5,430,000.
The gift tax annual exclusion increases to $15,000 in 2018. This is even more noteworthy because the annual exclusion amount has not changed in recent years – it has stayed at $14,000 since 2013.
Other values of interest include:
For gifts to a non-US citizen spouse, the first $152,000 given in each tax year is non-taxable.
Beginning in 2018, gifts received by US citizens from certain foreign persons must be reported if the aggregate value received in the tax year exceeds $16,111.
Irrevocable trusts and estates reach the top income tax rate of 39.6% on income exceeding $12,700.
The official IRS update documentation can be found here, if you want some light bedtime reading.
But if you are concerned about reducing estate taxes or making annual gifts greater in value than $15,000, contact our firm today. We can help create an estate plan or gifting strategy to achieve your goals without the headache.