Beginning in 2015, the lifetime estate and gift tax exclusion (which was indexed for inflation in the 2013 Tax Relief Act) will rise to $5,430,000 from $5.34 Million for 2014. This is the limit on tax-free transfers during life or at death. This means that couples who have not yet made any lifetime gifts will be able to avoid estate taxes with a combined estate of $10,860,000 or less. Importantly, this combined exclusion is only available for surviving spouses who file an estate tax return for their deceased spouse.
Once again this year, the annual gift tax exclusion remains at $14,000, meaning that you can make a gift of $14,000 to as many people as you like without counting against your lifetime exclusion. Spouses can combine their annual exclusions to give a combined $28,000 to anyone they choose.
In addition to this annual tax exempt amount, taxpayers can make non-taxable gifts to pay for tuition, dental, and medical expenses for anyone they choose. However, the payments must be made directly to the provider of the service – they don’t count as non-taxable gifts if they are made as reimbursements.
Have questions about how this might apply to you and your plans? Just call us at 713-748-7000.
Horizon Wealth Advisors is a Houston based fee-only wealth management firm. Horizon is a fiduciary advisor. We specialize in helping successful individuals and families understand, organize, and manage their often complex financial situations. Horizon offers integrated financial planning and investment management services.