IRS Releases 2025 Inflation Adjusted Numbers

   The IRS released inflation-adjusted tax figures for 2025.  Below are some notable highlights affecting various provisions in the Internal Revenue Code applicable for the 2025 tax year

• The lifetime gift, generation-skipping transfer, and estate tax exclusion amounts have been increased from $13,610,000 to $13,990,000.
• The gift tax annual exclusion amount has been increased from $18,000 to $19,000.
• The 37% top marginal tax rate will apply to individual income above $626,350 and married couples’ income above $751,600.

   The $380,000 increase in the lifetime exclusion amount presents estate planning opportunities for 2025, either to newly created irrevocable trusts or as “top-up” gifts to existing trusts.  Importantly, 2025 is the final year to “lock in” the bonus doubled exemption amounts before their scheduled reduction in 2026 from $10,000,000 to $5,000,000 (as indexed each year for inflation), presenting a “use it or lose it” situation between now and 2026 with regard to the $5,000,000 of increased exemption.  Please contact us if you would like to discuss your estate planning.