What should I know about these tax updates?
With the New Year here, why not take a moment to update your estate plan? We often think of personal life events, such as marriage or children, necessitating changes. However, so do updates and changes in law, such as tax laws, surrounding estate plans. Keeping abreast of the tax implications that will change as per the American Taxpayer Relief Act of 2012 is very important for your long-term plan.
Under these guidelines, 2015 Tax Exemption Inflation Increases include:
- Federal estate tax: $5,430,000 exemption and 40% top tax rate
- GST tax: $5,430,000 exemption and 40% top tax rate
- Lifetime gift tax: $5,430,000 exemption and 40% top tax rate
- Annual gift tax: $14,000 exclusion
The benefits of these inflation-adjusted exemptions is to allow for larger lifetime gifts, enable estate planning techniques to leverage assets, and to shift assets to relatives in a lower income bracket or living in states with no income tax.
Estate plans are long-lasting and meant to take care of a family following a death, but also involve continually review of financial and familial changes. Without this flexibility, plans may quickly become outdated.
When you are on top of these ever-changing laws, you can efficiently make the necessary changes to your plan to ensure peace of mind. Protect your family and your assets this year by responding to the most recent tax law updates.