Tax Update 2022

Last year’s proposed tax changes in the Build Back Better Act were full of sound and fury but ultimately no major tax legislation was passed. While the revised Build Back Better Act generally removed the estate and gift tax changes and many of the individual and corporate income tax hikes, whether it will pass, and in what form, is still unknown at this time.

What we do know are the new estate and gift tax inflation adjustments for 2022:

1. The gift, estate, and generation-skipping transfer tax exemptions were increased to $12,060,000. This means that each person may transfer, free of gift or estate tax, $12,060,000 during life, on death, or a combination thereof. Because of portability, the amount available per married couple is currently $24,120,000.
2. The annual gift tax exclusion was increased to $16,000. This means that each person may make gift tax free transfers up to $16,000 per donee, per year.