The IRS has announced Estate & Gift Tax Limits and 401k measures for 2019.
Regarding estate and gift changes, the basic exclusion amount has been increased to $11,400,000 per person for 2019. This is a $220,000 increase over the 2018 exclusion amount ($11,180,000).
The annual exclusion for gifts will remain unchanged from 2018 in the amount of $15,000 per person ($30,000 for married/joint gifts). Also, the first $155,000 of gifts to a spouse who is not a citizen of the United States (not applicable to gifts of a future interest) are not included in the total amount of taxable gifts.
Newly issued proposed regulations from the IRS will aim to clarify when the basic exclusion is different in years gifts are made compared to the basic exclusion in place in the year of death (presumably after 2025) and how that will ultimately impact the calculation of estate tax payable. The regulation will address whether gifts made during a period of high basic exclusion will remain sheltered when the basic exclusion drops after 2025.
Regarding 401k changes, the maximum annual salary deferral increased by $500 in 2019 to $19,000, with “catch-up” of $6,000 for employees aged 50 and over remaining unchanged.
For more information from the IRS about these new Estate & Gift Tax limits, visit the IRS website: Click here.
If you have questions regarding Estate & Gift Tax Limits and 401k measures, please contact a member of your DGC client service team, or Erica Nadeau, CPA, MST at 781-937-5311 / firstname.lastname@example.org or Scott Treacy, CPA at 781-937-5393 / email@example.com.