By: Henry Grix
Even if Congress fails this autumn to overhaul the Internal Revenue Code and, conceivably, repeal the federal “death” or estate tax, 2018 can be expected to bring relief in the form of taxpayer-friendly inflation adjustments. Under current law, important tax items are adjusted annually for cost of living, including the break points for income tax brackets, standard deductions, and certain estate, gift and generation skipping transfer tax exemption amounts. Although the IRS has not made an official announcement of the 2018 adjustments, Thomson Reuters projects that the exemption from federal estate tax will increase in 2018 to $5.6 million from the current $5.49 million. If this adjustment is made as expected next year, a single individual may shelter up to that $5.6 million amount from federal gift, estate and generation-skipping transfer tax, and a married couple with proper planning may shelter double that amount, or $11.2 million. The annual gift tax exclusion, which has been $14,000 for a number of years, is projected to increase to $15,000 in 2018. Thus, a married couple can give up to $30,000 to any number of loved ones next year without using any of either spouse’s $5.6 million exclusion amount. Please contact one of our tax and estate planning lawyers to learn more about planning for 2018 under current law.
For more information, please contact Henry M. Grix (Member) in our Troy, Michigan office at (248) 433-7548.