Tax Law Changes 2025
King Wealth Management
Sweeping Tax Law Changes in 2025
Important Updates to Estate and Gift Tax Exemptions
The sweeping new tax law changes of 2025, signed into law last week, brings significant changes to estate and gift tax exemptions. At King Wealth Management, we are committed to keeping our clients informed about these updates and their implications for your financial planning.
Key Highlights of the OBBBA
- Permanent Increase in Lifetime Exclusion: Starting January 1, 2026, the lifetime exclusion for estate and gift taxes will increase to $15M per individual. This amount is indexed for inflation and has no sunset provision.
- Portability Remains Unchanged: A surviving spouse can still elect to inherit the deceased spouse’s unused exemption, allowing a married couple to potentially shield up to $30M from federal estate and gift taxes.
- Estate/Gift Tax Rate: The tax rate remains at 40%, with no changes introduced by the OBBBA.
- Annual Gift Exclusion: The annual gift exclusion remains $19,000 per person in 2025, unaffected by the new law.
- SALT changes:State and local tax (SALT) deduction cap increases to $40,000 for some taxpayers, reverting to $10,000 in 2030.
What This Means for You
While the permanent nature of these changes reduces the urgency to complete gifting and estate planning before December 31, 2025, it remains critical to leverage the higher exemption opportunities. These changes apply only to federal estate and gift taxes and do not affect state laws. For example:
- New York State: The estate and gift lifetime exemption is $7.16M in 2025, with a 3-year clawback for gifts made within three years of death.
- Portability: Portability applies only to federal exemptions, not state exemptions.
Given the potential for future legislative changes, we strongly recommend ongoing estate and tax planning to secure your financial legacy.
Meet Our Expert
Jolyn Sweet, Financial Analyst and Tax Specialist at King Wealth Management, brings 20 years of experience as an Enrolled Agent specializing in sophisticated tax and estate planning. Jolyn works closely with our clients to navigate complex tax matters and optimize their financial strategies.
Contact Jolyn at [email protected] or call 518-306-5640 to discuss your estate planning needs.
Plan Your Financial Future Today
At King Wealth Management, we are here to guide you through these changes and help you make informed decisions. Contact us to schedule a consultation and take advantage of the new estate tax opportunities.
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