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The number of estate tax returns that were filed in 2001 is 17 times more than in 2021, according to the Tax Policy Center. That number has decreased so rapidly because the federal government continues to over more generous estate tax exemptions.
The following is a chart of the federal estate tax exclusions. the bottom and top tax rates that have been in effect since 1977 (assuming no taxable gifts before 1977), and the federal gift tax annual exclusions.
A filing is required if the gross estate of the decedent, increased by the decedent’s adjusted taxable gifts and specific gift tax exemption, is valued at more than the filing threshold for the year of the decedent’s death, as shown in the table below.
In 2019, the estate tax exemption increased to $11,400,000. For 2020, the estate and gift tax exemption went up to an eye-popping $11,580,000 per person. Then in 2021, the estate tax exemption threshold increases slightly to $11,700,000 per person.
The federal estate tax exemption for 2024 is $13.61 million. The estate tax exemption is adjusted annually to reflect changes in inflation each year. The exemption was nearly doubled under the...
In general, the Gift Tax and Estate Tax provisions apply a unified rate schedule to a person’s cumulative taxable gifts and taxable estate to arrive at a net tentative tax. Any tax due is determined after applying a credit based on an applicable exclusion amount.
The federal estate tax exemption amount went up again for 2024. A higher exemption means more estates may be exempt from the federal tax this year, which can save heirs from a hefty tax bill.
An estate tax return (Form 706) must be filed if the gross estate of the decedent (who is a U.S. citizen or resident), increased by the decedent’s adjusted taxable gifts and specific gift tax exemption, is valued at more than the filing threshold for the year of the decedent’s death, as shown in the table below.
For people who pass away in 2023, the exemption amount will be $12.92 million (it's $12.06 million for 2022). For a married couple, that comes to a combined exemption of $25.84 million.
The Tax Cuts and Jobs Act (TCJA) of 2017 roughly doubled the amount of these exemptions, which in 2023 allowed individuals to shield $12.92 million and couples up to $25.84 million from estate tax liability.