Each year, the estate tax and gift tax exemptions are re-evaluated and the government decides whether the exemption should be stay the same, be decreased, be increased or repealed completely. The estate tax exemption details the amount of assets that an individual can gift to beneficiary during lifetime and at death. Below are the updates for 2018.
First, lets discuss the estate tax and gift tax exemptions for 2017, which is still in effect through the end of the year. The estate tax exemption for the 2017 was $5.49 million dollars per individual (double for married individuals). The gift tax exclusion for 2017 was $14,000.00 per individual (double for married individuals).
The Internal Revenue Service (IRS) has finally announced the new estate tax and gift tax exemptions that will be applicable for 2018. The estate tax exemption for the 2018 will be $5.6 million dollars per individual (double for married individuals). The gift tax exclusion for 2018 will be $15,000.00 per individual (double for married individuals). In other words, in 2018, individuals can give up $15,000.00 to anyone they prefer, however, lifetime gifts beyond the annual exclusion amount count towards the $5.6 million dollar combined estate and gift tax exemption. The total amount of gifting that exceed $15,000.00 are added up and subtracted from the estate tax exemption at death ($5.6 million dollars currently).
Understanding and keeping updated with the estate tax and gift tax exemptions is important for every individual because if the estate tax exemption ever decreases, or gets repealed, estate planning that is already in place will need to be reviewed (or new estate planning will need to be created) to adjust to the new laws.
Contact The Presser Law Firm, P.A. if you or a loved one is interested in having an estate plan prepared. Our attorneys are knowledgeable in estate planning, asset protection and business law.