2023 Federal Estate and Gift Tax Numbers

April – spring, and renewal, and hopefully many gorgeous, sunny days, when the weather is perfect.  Also, tax time.

For an estate planning attorney, keeping updated on the latest federal tax numbers from the IRS, including estate and gift tax exclusion, is critical.  The following is a summary of the 2023 numbers for the lifetime estate and gift tax exemption and the annual gift tax exclusion.

Lifetime Estate and Gift Tax Exemption

The new exemption is $12.92 million per individual for 2023 gifts and deaths, up $860,000 from $12.06 million in 2022.

What exactly does this mean?

This means that an individual can shield $12.92 million and a married couple can shield a total of $25.84 million during their lifetimes without having to pay any federal estate or gift tax. For a couple who had previously maxed out lifetime gifts, they may now give another $1.72 million in 2023.

Annual Gift Tax Exclusion

The annual gift tax exclusion increased by $1,000 per recipient from $16,000, to $17,000.

What does the annual gift tax exclusion do?

It allows a taxpayer to give the excluded amount per recipient tax-free without using any of his or her lifetime gift and estate tax exemption.

For example, for a married couple, each spouse can gift $17,000 per recipient per year, for a total of $34,000/year per recipient as of January 1, 2023. So if you and your spouse have two children and four grandchildren, you may transfer a total of $204,000 to your descendants without touching your combined $25.84 million gift tax exemption.

A qualified estate planning attorney can help you work through tax issues related to your estate plan. Contact our St. Louis office at 314-303-3218 for if you’d like assistance with developing a comprehensive estate or elder law plan.

** The choice of a lawyer is an important decision and should not be based solely on advertisements.  This blog post is intended for informational purposes only and is not legal advice.

Written April 11, 2023