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At the beginning of the month, the Internal Revenue Service (IRS) revealed the official estate and gift tax limits for 2020, dictating the amount an individual or couple can leave to their beneficiaries or give away over their lifetime without paying any federal estate or gift tax. The exemption for next year is $11.58 million per person, up from $11.4 million in 2019. That’s $23.16 million per married couple. With the increase, couples who are currently at the limit have an additional $360,000 exemption value to pass on tax-free. The 2020 annual gift exclusion amount is $15,000, which is the same as 2019.
The upcoming 2020 presidential election has brought gifting discussions to the forefront. In recent years, the federal estate tax exemption was doubled to a base level of $10 million, and some people are worried that amount will decrease once again—possibly even to its 2009 level of $3.5 million.
Apart from the federal tax exemption, some states have their own estate and/or inheritance taxes. Individuals and couples living in affected states may be subject to state tax consequences even if they’re below the federal gifting limit. Affected states include Connecticut, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Nebraska, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, and the District of Columbia.
Read the full article from Forbes below.
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