Wednesday, March 14, 2012
What's Happening With the Federal Estate Tax
The federal estate tax is currently $5 million per person, with a tax rate of 35%. That means if you die with less than $5 million, there is no federal estate tax due. If you die, and are not married, most likely the amount above $5 million will be taxed at 35%. However, the law as written will expire at the end of the calendar year. Unless Congress and the President take action, as of January 1, 2013 estates above $1 million will be taxed, and the rate will be 55%. This WSJ article states that President Obama has proposed changing the law so that the exemption would be up to $3.5 million, with a tax rate of 45%. As the race for the White House heats up, this will likely emerge as an important issue. Resolution will probably not occur until after the general election in November. Stay tuned.