The estate tax changes matter to wealthy folks who try to whittle down their estates to keep below the jbl flip 4 promo code threshold and avoid the 40 federal estate tax.
Theres usually no Inheritance Tax to pay on small gifts you make out of your normal income, such as Christmas or birthday presents.Stuffing 529 college savings accounts or funding a gift trust are two ways to prepare your heirs for college.They could use it as seed money for a trust or to fund a grat, two popular wealth transfer strategies that can leverage these little slivers of exemptions, Kaufman says.Forbes' Kelly Phillips Erb has all the details on 2017 income tax rates here.The IRS has announced the estate and gift tax exemption amounts for 2017.A husband and wife can each make 14,000 gifts.Federal and Connecticut gift tax returns are due by April 15 of the year following the gift.You can learn more about the estate taxes for 2017 here (1). In 2017, the Connecticut lifetime new dad first christmas gift gift tax exclusion is 2,000,000.These gifts dont count towards any of the limits.The federal gift tax rate is 40 for the amount above the lifetime gift tax exclusion which means above 5,490,000 in 2017.So a woman who set up a trust for her kids with 5 million a few years ago could make new gifts to add to the trust and bring it up to the.49 million amount.Dont let the 11 million number fool you.Republican presidential candidate Donald Trump wants to repeal it, and impose a new carryover basis regime for estates over 10 million.These annual gifts do not count towards the lifetime exemption amount.Thus, by applying some of your lifetime gift tax exclusion, a gift with a value in excess of the 14,000 annual exclusion will result in no gift tax owed but you must file a Form 709 with the IRS.
Sure a husband and wife can each get their own exemption, meaning a couple will be able to give away nearly 11 million tax-free in 2017 (assuming they havent made prior lifetime gifts but its not automatic.
Theres also no Inheritance Tax to pay on gifts between spouses or civil partners.
Update: The December 2017 tax law made sweeping changes to the federal estate tax for 20, doubling the exemption amount.
This means that an individual can leave.49 million to heirs and pay no federal estate or gift tax. .