The Internal Revenue Service (IRS) recently announced that the estate and gift tax exemption is increasing next year: up from $11.18 million per individual in 2018 to $11.4 million in 2019.
This means that if an individual dies in 2019, she can leave $11.4 million to heirs and pay no federal estate tax. Using a concept called estate tax portability, a married couple can shield double that amount, $22.8 million, from estate taxes.
The IRS also confirmed that the annual gift exclusion amount for 2019 remains at $15,000 per individual per year, unchanged from 2018. This means you can give $15,000 to as many people you want (me, for instance) each year without filing a gift tax return.
Now that we have these big announcements out of the way, let’s unpack what all this fun information actually means.