2018 Expectations for Gift & Estate Tax Exclusions

Gift and Estate Tax Exclusions are Expected to Increase for 2018

Each year a number of tax figures are adjusted for inflation based on the average Consumer Price Index (CPI) for the 12-month period ending the previous August 31. Using the August 2017 data, Thomson Reuters Checkpoint has calculated adjustments for 2018 including tax brackets, standard deduction amounts, exemption amount and many other items. Increases in the annual gift exclusion and the lifetime gift and estate tax exclusion are particularly noteworthy providing favorable opportunities for wealth transfer.

Annual gifting using the annual gift exclusion can be a very efficient way to transfer wealth without incurring gift or estate taxes. This annual limit has been $14,000 per person or $28,000 for a married couple. This annual gift exclusion is projected to increase to $15,000 per person or $30,000 for a married couple.

The lifetime gift and estate tax exclusion is expected to increase from $5,490,000 to $5,600,000. This means that a married couple will able to transfer up to $11,200,000 without incurring federal estate or gift taxes. From a state tax perspective, North Carolina repealed the estate tax in 2013.

While the exclusions are expected to increase, the top estate tax rate remains at 40%.  These adjustments present planning opportunities for individuals or families with significant estates.

Contact JPS to guide you in your financial planning and tax exclusion opportunities. 


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