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Estate and Gift Tax Exemptions Increase in 2015

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The IRS has released annual inflation adjustments and tax rate schedules for 2015. Included are the new gift and estate tax exclusion amounts for 2015.  The new inflation adjusted numbers are available in Revenue Procedure 2014-61, issued October 30, 2014. 

Estate and Gift Tax Exclusion amounts for 2015

$5.43 million – Federal Estate Tax Basic Exclusion Amount

$5.43 million – Lifetime Gift Tax Exclusion

$14,000 – Annual Gift Tax Exclusion

The new estate and lifetime gift tax exclusion amounts are an increase of $90,000 from 2014. Because a husband and wife each get their own exemption, a married couple can give away $10.86 million tax-free in 2015 (provided they have not previously used up any of their exemptions.)

The top tax rate on amounts above the exemption limit is 40%. The high exemption amounts have pretty much done away with estate tax as an estate planning consideration for most people. Fewer than 4,000 estates are expected to owe federal estate tax this year.

Income Tax Brackets for 2015

The top federal income tax rate of 39.6 percent will affect singles whose income exceeds $413,200 ($464,850 for married couples filing jointly) in 2015. The other marginal rates are described in the Revenue Procedurehttp://www.irs.gov/pub/irs-drop/rp-14-61.pdf.

Standard Deduction Amounts for 2015

$6,300               Standard deduction for single taxpayers

$12,600             Standard deduction for married couples

$9,250               Standard deduction for heads of households

$1,250              Additional standard deduction for the aged or blind.This additional standard deduction amount is increased to $1,550 if the individual is also unmarried and not a surviving spouse.

Long-Term Care Insurance Limits for 2015

The IRS also released the long term care insurance premium limitations for 2015:

Attained Age                                              Premium Limit

40 or less                                                    $380

More than 40 but not more than 50       $710

More than 50 but not more than 60       $1,430

More than 60 but not more than 70       $3,800

More than 70                                             $4,750