There is currently no estate tax in Georgia, it was abolished in 2014. However, you might still have to pay federal estate taxes, depending on the size of your estate. The exemption amount has increased over the years. In 2022, the federal estate tax exemption was increased to $12,060,000. The exemption will increase to $12,920,000 in 2023. The current law is set to sunset (end) in 2026 with federal estate tax exemptions returning to the levels in place in 2017 of $5,490,000, with an adjustment for inflation.
Decreasing Your Tax Burden
You have several ways to decrease your tax burden, including gifting assets prior to your death.
As of 2011, the Internal Revenue Service allowed you to pass (or “port”) a decedent’s unused exemption to his or her surviving spouse as long as the decedent’s estate filed the estate tax return on time. This means that more of the surviving spouse’s estate is exempt from taxes. If the deceased spouse’s share of the exemption does not cover the entire estate, the spouse has other options he or she can implement prior to death.
If your estate is large enough to be taxable, you should create a plan to reduce the estate tax. While you probably would not want to gift your entire estate during your lifetime and may not be able to do so without incurring tax penalties, you can establish an annual gifting plan. In an annual gifting plan, you take advantage of the IRS’s annual gift exclusion that allows you to transfer $16,000 per year to any one person without incurring taxes in 2022 and this amount increases to $17,000 in 2023. Since the gift tax is exclusive – that means that the IRS looks at each gift separately – you can make several gifts of the exclusion amount each year to different people.
There are many other options to consider as well when planning to take advantage of the estate tax exclusions. We work with clients throughout Georgia to develop estate plans that address their specific needs. Call us today at 678.781.9230 to schedule a time to meet to discuss your needs.
Disclaimer
This Blog/Web Site is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this blog site you understand that there is no attorney-client relationship between you and Grissom Law, LLC.