The Internal Revenue Service recently announced numerous new inflation-adjusted limits for 2023 regarding your taxes, some of which will enable families to transfer more wealth tax-free to their heirs during their lifetime or at their death.

Another change affects the annual exclusion gifts and starting in 2023 you can gift up to $17,000 to as many people as you wish without impacting your lifetime gift and estate tax exclusion or causing you to pay any gift tax. Therefore, couples can give $34,000 ($17,000 each) in annual gifts to each child, grandchild, son-in-law, daughter-in-law, sister, brother, niece, nephew, neighbor or friend they wish. This is an increase for each spouse from $16,000 in 2022.

The next significant change is to your lifetime estate and gift tax exemption, also referred to as the unified credit, which increases from $12.06 million presently to $12.92 million in 2023.  This means a successful couple can pass on a total of $25.84 million without creating a gift tax liability.

In cases where couples have already maxed out their lifetime gifts, now they can give an extra $1.72 million to their families in 2023.  That’s in addition to making $34,000 per couple (two times $17,000) in annual gifts to each child, grandchild, sister, brother, niece, nephew, neighbor and friend they’re feeling generous towards.

Find all the new IRS numbers in Revenue Procedure 22-38.

Make a Difference and Have a Wonderful New Year!

If you would like to talk more about your specific situation or have made a New Year’s Resolution to start your estate planning process for 2023, contact our team at Borkuslaw Group today and make a live or online appointment!

Please note that information contained in this news alert is not and should not be construed as legal advice or opinion nor does this information alert create an attorney-client relationship.