Friday, December 26, 2008

Tax Changes in 2009

January 1st, 2009, brings two important changes to the tax arena surround estate planning:

  • First, the annual gift exclusion will increase from $12,000 to $13,000 per person per year. This means that an individual can give any one person a gift without triggering the gift tax if it is $13,000 or less in 2009. Of course, there are always exceptions to the rules. Ask a tax accountant or lawyer for advice on your specific situation.
  • Second, the applicable exclusion amount will increase from $2 million to $3.5 million per estate. This means that if a person dies and his or her estate's net worth (assets minus liabilities) is BELOW the exemtion no FEDERAL estate tax is owed. It is essential that surviving family and friends seek counsel a probate attorney to determine if the tax is owed; often times families will overlook assets that should be included in the calculation, such as life insurance proceeds.
Best wishes for 2009!

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