As a Florida resident, you may not be subject to estate taxes or gift taxes. But if your lifetime gifts are significant enough, it may just trigger federal taxes. This is why you must be strategic in your gift-giving, in that you must ensure that you always fall just below the allotted gift tax limit. Follow along to find out about the gift tax limit and how a proficient Broward County estate tax planning lawyer at The Probate Lawyers can help you lay out a cost-friendly path.
As of 2024, what is the gift tax limit?
Simply put, the gift tax is the federal tax placed on transfers of money, or other assets of monetary value, to individuals who are giving nothing in return. Therefore, to protect your estate from taxes, you may place up to $18,000 in your irrevocable trust within the year. Of note, this is the gift tax limit as of 2024. So given that the limit in 2023 was $17,000, it is projected to be raised again and again in the upcoming years.
What happens if I exceed this limit?
Say, for instance, that you have already exceeded the annual gift tax limit of $18,000 by placing $20,000 in your irrevocable trust. Well, this may mean that you are required to file a gift tax return with the Internal Revenue Service (IRS). However, this may not mean that you automatically owe gift taxes. Rather, your excess contribution of $2,000 may be added toward your lifetime gift tax exclusion. And as of 2024, the lifetime gift tax exclusion is $13,610,000. Similar to the annual gift tax exclusion, this limit is projected to be raised again and again in the upcoming years.
Based on this information, you may likely conclude that you only need to be concerned with the gift tax limit if you are a high-net-worth individual. Nevertheless, you must be aware of the below tax rates that your estate may be subject to should you exceed this allotted lifetime exclusion:
- An excess of $10,000 or less: an 18 percent tax rate.
- An excess of $10,001 to $20,000: a 20 percent tax rate.
- An excess of $20,001 to $40,000: a 22 percent tax rate.
- An excess of $40,001 to $60,000: a 24 percent tax rate.
- An excess of $60,001 to $80,000: a 26 percent tax rate.
- An excess of $80,001 to $100,000: a 28 percent tax rate.
- An excess of $100,001 to $150,000: a 30 percent tax rate.
- An excess of $150,001 to $250,000: a 32 percent tax rate.
- An excess of $250,001 to $500,000: a 34 percent tax rate.
- An excess of $500,001 to $750,000: a 37 percent tax rate.
- An excess of $750,001 to $1,000,000: a 39 percent tax rate.
- An excess of $1,000,000 or more: a 40 percent tax rate.
Without a doubt, your next step should be to employ one of the talented Broward County estate lawyers. So please reach out to us at The Probate Lawyers immediately.
