Massachusetts estate tax and the Federal gift tax regimes can yield surprising results. We often still encourage our clients to make gifts if they would like to, not only for the estate tax benefit but also for the benefits of generosity.
This month, we share tax exemptions that you may be entitled to.
~ Wendy Guthro, Attorney & Counsellor at Law
“Success is the sum of small efforts repeated day in and day out.”
~ Robert Collier
2023 Federal Estate and Gift Tax Exemptions
The IRS Lifetime Gift and Estate Tax Exemption
you can give during your lifetime, or at your death, and be exempt from federal
estate and gift taxes has risen from $12,060,000 to $12,920,000. This means
that a married couple could gift more than $25 million in assets tax free. This
exemption is, however, going away in 2026 as it reverts back to the prior
exemption amount of $5 million, adjusted for inflation, or $7,000,000.
For surviving spouses, the martial deduction for gift and estate
taxes remains unlimited except for surviving spouses who are not U.S. Citizens.
For non-citizen spouses, the marital deduction is $175,000 for 2023.
IRS Annual Exemption
addition to the lifetime exemption, there is also an annual gift tax exemption.
That annual exemption goes from $16,000 to $17,000, in 2023 for each person you
make a gift to in 2023.
State Estate Tax Exemptions
states, such as New Hampshire, are “coupled” with the Federal IRS exemptions
noted above. Therefore, if you die as a NH resident in 2023 with an estate
valued less than $12,920,000, no estate tax is likely due. Conversely, as is
the case in Massachusetts, the 2023 State Estate Tax Exemption at death remains
at just $1,000,000 per person, a much lower threshold than the Federal level,
resulting in many more people owing a Massachusetts Estate Tax at death.
though a married couple collectively have a $2,000,000 exemption, they need a
plan while both of them are alive to “use” the first-to-die’s $1,000,000
exemption so it is “not included” in the second-to-die’s Estate Tax
Federal or State Solutions
find yourself in a potential position of sustaining an Estate Tax, have some
fun and spend your money before you die to get below the taxing threshold! If not
and you are a married couple, consider a tax planning Trust which can save you
thousands in estate taxes while also avoiding probate.
Massachusetts Estate Administration – Noteworthy
If you're responsible for the estate of someone who died as a
Massachusetts resident, whether or not you use the Probate process, you may
need to file an estate tax return. If the estate is worth less than $1,000,000,
you don't need to file a return or pay an estate tax. Massachusetts estate tax
returns are required if the gross estate, plus adjusted taxable gifts, computed
using the Internal Revenue Code in effect on December 31, 2000, exceeds
$1,000,000. If the gross estate exceeds the filing threshold of $1,000,000, the
return and tax payment are due nine months after the date of the decedent's
If you need help determining if an estate tax return should be filed or
in settling an estate, contact our office to arrange a consultation and to work
with your tax professional.
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To provide clients with optimum service, we focus our practice on Estate Planning, Estate & Trust Administration, Probate, Asset Protection and Elder Law issues. If you have a question, need advice or counsel, contact us online or call 781-229-0555.
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Attorney and Counsellor at Law
Seventeen Treetop Court Burlington, Massachusetts 01803 United States
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