New Estate Tax Exemption Limits for 2020
It seems like every year, the amount of an estate that is exempt from taxes increases. While the largest increase in recent history occurred between 2017 and 2018, this is the second year in a row with a more moderate increase. How much of your estate is now exempt from taxation? Have there been any changes to the gift tax exclusions?
2020 Estate Tax Exemption Limit
For 2020, the estate tax exemption has increased from $11.4 million to $11.58 million. That’s an increase of $180,000 that won’t be taxed if you are passing a massive estate on to the next generation. But what if you have more than that to give, or what if you want to be generous and see your family enjoy part of their inheritance while you are still alive?
Annual Gift Exclusion Laws
The annual gift exclusion amount is holding steady at $15,000 this year. However, if you get creative you can still give a lot more without affecting your overall estate tax exemption of $11.58 million. For example, you and your spouse can each give $15,000 per year to the same person. You can also each give $15,000 tax-free to that person’s spouse. So if you to dispense $60,000 to a couple, as a couple, all you have to do is divide it up into four $15,000 checks with the right names on them, and all of it will be tax-exempt!
Pass on Your Inheritance to Family, Not the Government
Petrov Law Firm can help you understand how to pass on your estate without it being subject to heavy taxation. Call 619.344.0360 today to schedule an appointment.