by Frank Miltenberger
With the year coming to a close, now is a perfect time to think about your gift and estate tax planning. Below, we have outlined key opportunities to consider before year-end and for next year.
Annual Gifting Exclusion Limits for 2024 and 2025
For 2024, the annual gift tax exclusion is $18,000 per recipient (or $36,000 for married couples who gift to any one recipient). This means you can gift up to this amount to as many recipients as you’d like without dipping into your lifetime gifting exemption.
Looking ahead to 2025, the annual exclusion will increase to $19,000 per recipient, allowing for a $38,000 combined gift by a married couple to any one recipient.
Estate Tax Planning Considerations
In addition, thanks to the lifetime federal gift and estate tax exemption, the total amount you can give over your lifetime without incurring federal estate or gift taxes, is currently $13.61 million per individual ($27.22 million for married couples) in 2024. In 2025, this will increase to $13.99 million per individual ($27.98 million for married couples).
It is important to note that under current law, these historically high exemption levels are set to expire at the end of 2025. Beginning in 2026, the exemption will revert to pre-2018 levels, which is estimated to be around $6 million per individual unless Congress acts. As such, you may want to take advantage of these exclusions before the end of 2025.
We are here to help you make the most of these opportunities. If you have any questions or want to discuss strategies that work best for you, please do not hesitate to contact us.
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