With last month’s elections resulting in Republican control of the presidency and both houses of Congress, an extension of the Tax Cuts and Jobs Act of 2017 (TCJA) now seems likely—although not guaranteed. As a quick refresher, the act doubled the estate tax exemption, bringing it to $13.6 million for single filers and $27.2 million for those filing jointly (adjusted for inflation). In 2025, these limits will increase to $13.99 million and $27.98 million, respectively. If the act isn’t extended, the estate tax exemption would revert to an estimated $7 million per single filer or $14 million for joint (adjusted for inflation) in 2026. Originally presented as part of overall tax reform, the TCJA’s stated objective was to reduce taxes and stimulate economic growth. Deep division still exists as to whether the act has accomplished this. As Congress decides the fate of the act, lawmakers will likely consider how its more than $4 trillion price tag over the next decade, according to one analysis, with an estimated $126 billion revenue reduction for the estate planning tax cuts, according to another, would impact the federal budget. To gift or not to gift? With the odds of a TCJA sunset shrinking—especially considering that some congressional Republicans went so far as to introduce a Death Tax Repeal Act in January—clients already planning to make larger gifts may wish to take action now, especially if the gifting fits within a bigger plan to also leverage the state estate tax advantages that gifting can offer.
As a quick refresher, the act doubled the estate tax exemption, bringing it to $13.6 million for single filers and $27.2 million for those filing jointly (adjusted for inflation). In 2025, these limits will increase to $13.99 million and $27.98 million, respectively. If the act isn’t extended, the estate tax exemption would revert to an estimated $7 million per single filer or $14 million for joint (adjusted for inflation) in 2026.
Originally presented as part of overall tax reform, the TCJA’s stated objective was to reduce taxes and stimulate economic growth. Deep division still exists as to whether the act has accomplished this. As Congress decides the fate of the act, lawmakers will likely consider how its more than $4 trillion price tag over the next decade, according to one analysis, with an estimated $126 billion revenue reduction for the estate planning tax cuts, according to another, would impact the federal budget.
To gift or not to gift? With the odds of a TCJA sunset shrinking—especially considering that some congressional Republicans went so far as to introduce a Death Tax Repeal Act in January—clients already planning to make larger gifts may wish to take action now, especially if the gifting fits within a bigger plan to also leverage the state estate tax advantages that gifting can offer.