The estate tax exemption for 2015 has jumped to $5.43 million per person, up from $5.34 million, due to an adjustment for inflation, the IRS has announced.
For a married couple, the combined exemption increases to nearly $11 million, notes a story in the Wall Street Journal.
The annual gift exclusion, however, will remain at $14,000 per recipient in 2015, the story points out. This is the amount that may be given tax-free to any individual. For married couples, they can combine the exemption and make a gift of $28,000 per recipient without using up their lifetime exemption.
With the now large federal exemption limit, few estates are expected to owe taxes this year. In fact, only about 3,700 estates, or just over 1 percent of the total, will owe estate taxes to the federal government.
As a result, estate planning strategies are shifting to ways to avoid state estate taxes and capital gains taxes, as well as making sure the clients’ personal goals and objectives are met. It is important to review your planning in light of the higher exemption. Please contact us to review your planning and get a head start for the new year!