Nevada residents considering planning their estate as tax season is in full swing may be interested to hear that the IRS somewhat recently formally announced the gift and estate tax exemptions for 2015. Taxpayers will not need to file any paperwork with the government for gifts of up to $14,000 per person. Furthermore, they will not have to pay taxes on the first $5.34 million on assets in their estate. The gift tax remained the same from 2014 while the estate tax exemption has slightly risen.
Both estate tax and gift tax amounts are tied to inflation, meaning that these numbers could rise in any given year. Furthermore, a married couple are allowed to make gifts of $14,000 each before triggering any reporting to the IRS. This means that they could give up to $28,000 per person with no limits as to the number of people who can receive a gift.
There are some occasions in which an individual can make a gift of any amount without having to report it to the IRS. If the person pays medical or dental bills on the behalf of a friend or relative directly to the service provider, it will not count toward his or her yearly exemption. Those who fund a 529 account may fund up to five years’ worth of exemptions into an account in one year.
Making gifts to others while still alive may reduce estate taxes after an individual passes on. Those who are interested in giving away assets prior to death may wish to talk to an estate planning attorney. The attorney may be able to help with will planning and advise on gift and estate tax matters. Sound will documentation could enable individuals to provide for their family and cement their legacy while having more control over how their assets are actually distributed after they pass on.