Every year some, but not all, tax thresholds are adjusted for inflation. More than 3 dozen modifications will be in effect in 2015, according to an announcement from the Internal Revenue Service.
Here are a few:
Estate tax exemption. Decedents dying on or after January 1, 2015 have a $5,430,000 exclusion. Until December 31, 2014, the estate tax exclusion is $5,340,000.
Gift tax annual exclusion. Remains the same at $14,000.
Gift tax annual exclusion for non-citizen spouses. For 2015, the gift tax exclusion for gifts made to a non-U.S. citizen spouse is $147,000. This is $2,000 higher than the current exclusion.
Tax brackets for trusts are included in the announcement as well. If taxable trust income is over $12,300 in 2014, taxpayers must pay $3,179 plus 39.6% of the amount over 12,300. In 2014, the IRS uses $12,150 as a top bracket guide, and all amounts over are taxed at $3,140 plus 39.6% of the amount in excess. Investment income in this top bracket is also subject to the 3.8% Net Investment Income Tax
. A sliding scale is in place for smaller amounts. Click here for a table addressing 2015 Trust Income Tax
.While most Americans are absorbed in year-end holiday travels, commitments, and New Year’s resolutions, use time with family to discuss estate plan updates for the New Year. With family interests in mind, now that the IRS established annual adjustments taxpayers can make more informed decisions with their estate planning attorney.
For the rest of the provisions and tax rate tables for 2015, visit IRS 2015 Inflation Adjustments.