The Tax Cuts and Jobs Act of 2017 brought precedent-breaking changes to America that affected both businesses and individuals, doing things like reducing marginal tax rates, increasing deductions, and increasing child tax credit. Without interference, it is set to disappear and tax regulations would back to pre-Act numbers at 2026.
With the Act, the federal estate and gift tax exemption doubled from its previous limit of $5,490,000. This meant that people could have twice as much money as before, and still receive the benefit of not having their estate taxed by the federal government. This is especially good news if you live in the majority of states that do not have their own separate estate tax.
However, with the recent shift in government from the election, it looks like interference will happen sooner rather than later. During Biden’s campaign, he was reported stating, “I’m going to get rid of the bulk of Trump’s $2 trillion tax cut, and a lot of you may not like that, but I’m going to close loopholes like capital gains and stepped-up basis,”. With the very vocal opposition to the Act in the last couple of years combined with the ever-increasing national debt while states shut down, lowered taxes won’t be a very popular idea in government.
With increasing taxes on the horizon and no real predictions as of now on how fast changes will arise, it is important for those concerned about their estate planning to act quickly. Lower exemptions for estate taxes mean substantially less control over earnings. To keep as much control as possible, it’s important for people to contact their attorney to explore their options.
One of the specialties at Jerimy Kirschner & Associates, PLLC is estate planning. Whether someone needs to create estate planning for themselves as soon as possible to make sure they have the best benefits they can while they still can, or if someone wants to make sure their estate planning is airtight with the coming changes, our firm has the knowledge and experience to guide through the process.