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Estate and Gift Tax Exemption Increases for 2023

by | Oct 24, 2022 | estate planning, estate tax, gift tax exemption

Estate and Gift Tax Exemption Increases

The limit on annual tax-free gifts without interfering with the estate tax exemption has moved from 16,000 to 17,000 per donee for 2023. This means that a couple could give $34,000 to each of their adult children, grandchildren, etc., every year. This is a very powerful estate planning and tax planning tool. Note in 2022 the $16,000 limit still applies, but this can be very useful for year-end tax plans. Please call me if there are any questions, particularly for business owners with children in their business, because they can make a joint December gift of $32,000 and a January gift of $34,000 of business interest.

The federal estate tax exemption is indexed for inflation. The exemption amount for 2023 will increase from $12.06 million to $12.92 million per person. That means starting in 2023, a couple can have an estate of close to $26 million that is Federal estate tax-free. This frees up most estates from federal estate tax worry and enables many interesting planning techniques without being concerned about Federal Estate Tax.


October 23, 2022