October 2022:
The MLO Minute: “2023 Inflation Adjustments”
By Kelly Hayes, Esq., MLO Estates and Trusts Attorney —
It’s that time of year again…the IRS recently issued 2023 inflation adjustments for various tax provisions, including increased exemption amounts for the estate, gift and generation skipping transfer taxes and an increase to the annual exclusion amount for gifts made in the 2023 calendar year.
The lifetime estate, gift and generation skipping transfer tax exclusion amount increased to 12.92 million dollars per individual (up from 12.06 million in 2022). A married couple can utilize up to 25.84 million dollars of exemption before incurring any tax liability.
The annual exclusion for gifts increased to $17,000.00 for gifts made in the 2023 calendar year. Only gifts made to individuals above the annual exclusion amount require the filing of a gift tax return. Annual gifts to an individual in excess of the exclusion amount will reduce your lifetime estate, gift and generation skipping transfer tax exemption amount.
Other inflation adjustments include:
Increases to the standard deduction for the 2023 tax year:
- The standard deduction for married filing jointly increased to $27,700;
- The standard deduction for single filers increased to $13,850; and
- The standard deduction for head of household increased to $20,800.
For more information on all 2022 inflation adjustments see Rev. Proc. 2022-38
https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2023
