- In earlier entries, we warned of the changing tax landscape and the possibility that a new administration will bring a new set of tax laws and regulations. One aspect of the Internal Revenue Code particularly ripe for change is the high level of exemption amounts applicable to estates and gifts.
The Internal Revenue Service announced today the estate and gift tax exemption limits for 2021: the estate and gift tax exemption will be $11.7 million per individual, up from $11.58 million in 2020. That means an individual could give or bequeath $11.7 million to heirs and pay no federal estate or gift tax, while a married couple could shield $23.4 million. (The exclusion amount for annual gifts remains at $15,000, or $30,000 for married couples under certain conditions.)
For high net worth individuals, this presents an opportunity. If these exemption amounts are reduced next year, any gifts made now will most probably be secure and free from IRS recoupment if and when new and much lower limits are enacted. If you are in such a category, then it is worthwhile to consider some planning moves now.
See linked article from The Journal of Accountancy for this and additional income-tax related changes:
2021 IRS Tax Tables and Inflation Adjustments
- Also, the Treasury Department just announced inflation-adjusted figures for retirement account savings for 2021. For the new year, one can save for retirement in tax-advantaged accounts the inflation-adjusted amount of $58,000. For more information, seek out the advice of your counsel or accountant. We at Jaspan Schlesinger are fortunate to have as one of our colleague Victor M. Finmann, a nationally-recognized authority on such esoteric topics.
See linked article from Forbes for this and additional pension plan and retirement savings accounts: