2016 IRS Estate Tax Rate Change
The IRS recently announced the updates to the federal estate and gift tax rates for 2016. Under federal law, the rates are tied to inflation and are reviewed annually for changes.
For 2016, the federal estate tax rate is increase from $5.43 million to $5.45 million. This means that an individual can leave up to $5.45 million to their heirs without any federal estate tax or gift tax due. A married couple can shelter up to $10.9 million from estate and gift tax. It is important to note that this only applies to federal estate and gift tax, state estate and gift tax amounts may be different.
The annual gift tax exclusion remains unchanged for 2016 at $14,000.