Tax Exclusion Updates for 2022

Tax Planning Opportunities for 2022

Tax Planning Opportunities

Multiple proposals regarding estate tax exemptions and rates came and went during 2021, with little change to the law. This means there is still time to take advantage of the “perfect storm” of planning opportunities available in 2022.

The IRS has announced the following changes to the estate and gift tax exclusions as of January 1, 2022, making these opportunities even more advantageous:

  • Increase of the lifetime federal gift and estate tax exclusion amount, and the generation-skipping transfer (GST) tax exemption, from $11,700,000 to $12,060,000 for individuals, or $24,120,000 for a married couple. This amount is set to be reduced to $5 million (adjusted for inflation) by the end of 2025.
  • Increase of the annual federal gift tax annual exclusion amount from $15,000 to $16,000, or $32,000 for a married couple.

Note that Congress could still pass legislation that adjusts these amounts sooner than expected, so we recommend reviewing your current estate plan to ensure that your documents continue to achieve your goals.