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TAX UPDATE: In terms of transfer taxes, the good news is that the federal estate and gift tax exemption currently is $13.61 million per person, or $27.22 million for a married couple, although the exemption amount is scheduled to be cut in half at the end of 2025 unless Congress acts. The bad news is there’s a 40 percent tax on anything above that exemption amount. If you choose to pass any assets down to grandchildren or future generations, the federal generation-skipping transfer tax can apply to gifts above the exemption level.

The year 2026 is quickly approaching, bringing substantial changes that may affect your estate tax situation. The Tax Cuts and Jobs Act (TCJA) in 2017 significantly increased the federal estate tax exemption to $10 million adjusted for inflation, which is now at $13,610,000.00. This is the amount you can gift or leave to your loved ones at your death without incurring a gift or estate tax liability. Any portion of the exemption used during lifetime reduces the total exemption amount available at death for estate tax purposes. However, the countdown has begun for the potential sunset of this generous exemption by the end of 2025. Adjusting for inflation, the Congressional Budget Office estimates the new exemption amount will be $6.4 million in 2026. There are strong arguments for and against the changes in legislation. Whether the current exemption amount remains or is reduced to roughly $6.4 million, valuable insights from professional advisors can prepare you for either scenario. What is not taxable today might be taxable tomorrow. https://lnkd.in/g4_Jht9S

IRS announces bigger estate and gift tax exemption for 2025 As the current Gift and Estate Tax Laws are scheduled to sunset in 2026, here is an article regarding the rules for 2025: https://lnkd.in/gGXwiiNC

Death and Taxes: We explain why the estate tax isn’t working. https://lnkd.in/ds_i6ZPp

TAX UPDATE: In terms of transfer taxes, the good news is that the federal estate and gift tax exemption currently is $13.61 million per person, or $27.22 million for a married couple, although the exemption amount is scheduled to be cut in half at the end of 2025 unless Congress acts. The bad news is there’s a 40 percent tax on anything above that exemption amount. If you choose to pass any assets down to grandchildren or future generations, the federal generation-skipping transfer tax can apply to gifts above the exemption level.

As we enter firmly into the latter half of the calendar year, it may be wise to revisit the potential 2025 sunset on your lifetime gift and estate tax exemption. Our blog highlights the importance of maximizing your tax benefits now while the lifetime estate and gift tax exclusion is still at the current, historically high level: #TaxBenefits #FinancialPlanning

The federal estate tax exemption sunsets in 2025. Learn more about what to do to make the most of the higher threshold. Read more now.

The federal estate tax exemption sunsets in 2025. Learn more about what to do to make the most of the higher threshold. Read more now.

The federal estate tax exemption sunsets in 2025. Learn more about what to do to make the most of the higher threshold. Read more now.