Rebecca Rosenberger Smolen, left, and Amy Neifeld Shkedy, right, of Bala Law Group. 2023 Year-End Tax Planning Guidance and Tips
As we reach the end of the year, it is a good time to focus on addressing year-end tax planning. At this late juncture, many of our clients (and, hopefully, readers too) have already started to implement or, at least, think about year-end planning.
December 18, 2023 at 09:34 AM
9 minute read
Trusts and Estates
As we reach the end of the year, it is a good time to focus on addressing year-end tax planning. At this late juncture, many of our clients (and, hopefully, readers too) have already started to implement or, at least, think about year-end planning. In this article we have listed some key issues to consider before the end of 2023:
|- Annual Exclusion Gifts.
Each individual can make cumulative annual gift tax exclusion gifts of $17,000 per donee during 2023 ($34,000 for a married couple electing to split gifts). The IRS has announced that this amount will increase to $18,000 for 2024 ($36,000 for a married couple electing to split gifts in 2024). Annual exclusion gifts do not use any portion of an individual's federal estate and gift tax exemption (discussed below). Annual exclusion gifts can be made outright, through 529 Plan benefits (education savings accounts), or in special qualifying trust structures. For those still considering such gifts, it may be worthwhile to plan for 2023 and 2024 at the same time, keeping in mind that gifts for 2024 can be made effective as of Jan. 1.
|- Use of Exemption.
For 2023, the federal and gift tax exemption amount is $12.92 million per individual (allowing a married couple to shield up to $25.84 million from federal estate and gift taxes), and is projected to increase for inflation in 2024 to $13.61 million per individual (or $27.22 million for a married couple). There is no guarantee that these exemption amounts will remain at such high level. Under current law, the exemptions are set to be cut in 2026 to 50% of the current levels.
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