Kimberly N. Barrot, Esq Jessie J. Burgueño, Esq
2025 Federal Gift And Estate Tax Law Changes
Federal Gift Tax The federal gift tax law has increased by $1,000 to allow each taxpayer to gift up to $19,000 per year to any one individual without reporting the gift and without reducing his/her available estate tax exemption. A married couple can now gift up to $38,000 per year to any one individual.
Federal Estate Tax The federal estate tax exemption has increased to $13,990,000 for an individual taxpayer or $27,980,000 for married taxpayers. This allows for an individual taxpayer to pass up to $13,990,000 and married couples to pass up to $27,980,000 (less taxable gifts as discussed above), without incurring federal estate tax liability. The amount which exceeds the federal estate tax exemption is subject to federal estate tax at an applicable tax rate of 40%. Important Reminder: Under current law, the federal estate tax exemption amount, which is adjusted annually for inflation, will revert back to $5,000,000 (as adjusted for inflation) on January 1, 2026. We will notify our clients if there are any changes to the Federal Estate Tax law under the new administration.
A taxpayer is not limited to the number of individuals they can gift annually. Any taxpayer who gives a gift of more than $19,000 to any one person is required to file a gift tax return, Federal Form 709 and the amount in excess reduces the taxpayer’s available federal estate tax exemption at his or her death.
Important Notice for Business Owners: Beneficial Ownership Information (BOI) Reporting Requirement
Who Should Take Action: If you are a business owner or play a key role in managing or making decisions for a qualifying company — whether it’s a corporation, limited liability company (LLC), limited liability partnership (LLP), or similar entity organized with a Secretary of State — you may need to comply with a newly released federal reporting requirement. This requirement is for the company (known as “Reporting Company”) AND for the individuals that own 25% or more of the company and/or plays a significant role in managing or making decisions for the business. W hat Y ou Need to Know: Many U.S.-based and foreign companies registered in the U.S. are required to report Beneficial Ownership Information (BOI) to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). The deadline for submitting your BOI report is January 1, 2025.* Required Information: Companies must provide details about the business and the individ-uals who own or control 25% or more of the company, and/or play a significant role in managing or making decisions for the company.
Penalties for Noncompliance: Failure to fil e the required BOI report can result in substantial fines, exceeding $500 per day for each day the form is not submitted. How to File Y our BOI Report: Access the reporting portal and find more information on FinCEN’s official website: fincen.gov . You will need to upload identification documents (such as a driver’s license or passport) as part of the filing requirement. Need Help? Please reach out to your CPA or consult the FinCEN website for further guidance. Update – December 3, 2024: A federal court ruling has temporarily blocked the enforcement of the BOI reporting requirements nationwide. FinCen is stating that the Department of the Treasury is appealing the order. Businesses are still encouraged to report. We will notify clients on updates to the filing requirements. * The deadline of January 1, 2025 is for businesses established before January 1, 2024. Businesses that were created in 2024 have a 90-day deadline from their effective date of formation or registration. Those created in 2025 or later have a 30-day deadline.
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