Independent Thinking®
2015 Estate & Income Tax Planning Landscape
January 20, 2015
Although the 2015 Federal income tax and wealth planning environment remains relatively unchanged from 2014, it is still important to understand and take advantage of available planning opportunities.
The annual gift and generation-skipping tax exemption increased to $5.43 million per person for 2015, up $90,000 from $5.34 million in 2014. If you have utilized the earlier exemption, you can give the additional $90,000 in 2015. The federal gift tax rate remains at 40%. (Connecticut is the only state that also imposes a gift tax for gifts over $2 million.) The annual exclusion remains at $14,000 per person. Married couples can split gifts and give $28,000 to any individual without utilizing any of their gift tax exemption.
The federal estate tax exemption also increased to $5.43 million per person for 2015. The federal estate tax rate is at 40%. Portability of the federal estate tax exemption, where the surviving spouse can use the deceased spouse’s unused exemption, remains available. Note that the state estate tax exemption and tax rates may differ from the federal amounts, and the state estate tax exemption is generally not portable. Hawaii is the only state that allows for portability, although Maryland will allow for portability in 2019.
For those in the top federal income tax bracket, ordinary income tax rates remain high at 39.6% and the long-term capital gains tax rate at 20%. The additional 3.8% Medicare surtax on net investment income above certain thresholds for individuals and non-grantor trusts remains intact.
Please contact your Evercore Wealth Management Wealth Advisor with any questions you may have or to discuss your specific circumstances.