Lost in the scuffle over all the taxes that progressives want to raise in 2025, is the big increase in the death tax. Our friends at the Family Business Coalition estimate that the number of families that will have to pay estate tax will double or triple – and those aren’t billionaires we are talking about.
NBC News warns that now is the time for some serious tax planning, before the Trump tax cuts expire, and the estate and gift tax exemption shrinks:
The tightening presidential race has touched off a wave of tax planning by ultra-wealthy investors, especially given fears of a higher estate tax, according to advisors and tax attorneys.
The scheduled “sunset” of a generous provision in the estate tax next year has taken on new urgency as the odds of a divided government or Democratic president have increased, tax experts say. Under current law, individuals can transfer up to $13.61 million (and couples can send up to $27.22 million) to family members or beneficiaries without owing estate or gift taxes.
The benefit is scheduled to expire at the end of 2025 along with the other individual provisions of the 2017 Tax Cuts and Jobs Act. If it expires, the estate and gift tax exemption will fall by about half.
Some financial planners are calling it “The Ugliest Sunset”:
At least with some planning the impact can be partially avoided. Most of the other potential trillions of dollars of tax hikes coming without an extension of the Trump tax cuts are much harder to plan around.