2025 Estate Tax Update

As we enter 2025, it’s important to stay informed about the current estate tax exemptions and laws that may impact your estate planning. Here’s a brief summary of 2025 estate tax update:

  • Federal Estate Tax Exemption: For 2025, the federal estate tax exemption is $13.99 (up from $13.61) million per individual and $27.98 million for a married couple. This means that estates valued below these amounts are not subject to federal estate taxes. However, it’s crucial to note that the Tax Cuts and Jobs Act of 2017 includes a sunset provision, which will reduce the exemption to approximately $5 million per individual (indexed for inflation) starting January 1, 2026, unless Congress enacts further changes.
  • California and Utah Estate Tax: California and Utah do not impose separate state estate tax, so only the federal estate tax applies to residents.
  • Gift Tax: The federal gift tax annual exclusion is $19,000 per recipient in 2025. Gifts exceeding this amount may count against the lifetime exemption, which is shared with the estate tax exemption.
  • Generation-Skipping Transfer Tax (GSTT): This tax applies to transfers to individuals two or more generations below the donor, such as grandchildren, and shares the same exemption amount as the estate tax.

These updates highlight the importance of reviewing your estate plan to ensure it aligns with current laws and your personal goals. As always, we are here to assist you with any questions or adjustments you may need to make to your estate plan. Wishing you a prosperous and well-planned New Year!

Important Update on the Corporate Transparency Act

As we move into the New Year, it’s crucial for corporations to be aware of the new filing requirements under the Corporate Transparency Act (CTA).

Beneficial Ownership Information (BOI) Report

Under the CTA, certain corporations, limited liability companies (LLCs), and other entities are required to file a Beneficial Ownership Information (BOI) report with the Financial Crimes Enforcement Network (FinCEN). This report must include:

  • Names: The full legal names of the beneficial owners.
  • Dates of Birth: The birthdates of each beneficial owner.
  • Addresses: Current residential or business addresses.
  • Identification Numbers: Unique identifying numbers from acceptable identification documents, such as a passport or driver’s license.

Who Needs to File?

The requirement applies to both domestic and foreign entities registered to do business in the United States. However, there are exemptions for certain entities, such as publicly traded companies and certain regulated entities.

Filing Deadlines

Entities created or registered before January 1, 2024, must file their initial BOI report by January 1, 2025. Entities created or registered after January 1, 2024, must file within 90 days of formation or registration.

Compliance and Penalties

Failure to comply with the CTA’s reporting requirements can result in significant penalties, including fines and potential criminal charges. It is essential for corporations to ensure timely and accurate filing to avoid these consequences.

We encourage all our clients to review their obligations under the Corporate Transparency Act and take the necessary steps to comply with the new requirements.

Stay tuned for more 2025 estate tax updates.