Increased Estate And Gift Tax Limits For 2023

The annual estate and gift tax exemption in 2023 is $12.92 million per individual, representing an increase due to inflation from the 2022 exemption of $12.06 million. This means that a married couple can now pass on to others during their lifetime or at death a total of $25.84 million without incurring gift or estate tax. For an individual that already maxed out their lifetime gifts in 2022, they can now gift another $860,000 this year, or a couple can give away another $1.72 million.

Keep in mind that absent any legislative action, current laws provide that the estate and gift tax exemption amount will be significantly reduced after December 31, 2025, when the exemption amount is set to revert back to $5 million indexed for inflation.

The annual gift tax exclusion amount is also increasing in 2023 to $17,000 per year, representing an increase from the 2022 amount of $16,000. This means that a married couple can now gift up to $34,000 per recipient this year without incurring gift tax, thereby removing the assets from the donor’s taxable estates and allowing the assets to appreciate in the recipient’s estate.

Please contact us if you wish to schedule a consultation to discuss the impact of any of these changes on your estate plan.