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Tax Law Changes on the Horizon

| Apr 19, 2021 | Firm News

Senate Budget Committee Chairman Bernie Sanders (I-VT) recently introduced legislation, titled “For the 99.5 Percent Act”, that, if passed, will create significant changes in estate and gift taxes.

Key aspects of the proposed act include:

  • Lowering the estate tax exemptions to the 2009 thresholds of $3.5 million per individual and $7 million per married couple from the current thresholds of $11.7 million and $23.4 million. The gift tax exemption would be lowered to $1 million per individual. These new lower limits would not be indexed for inflation.
  • Raising the estate and gift tax rate from the current rate of 40% to 45%. For amounts more than $10 million, the rate would be 50%; amounts greater than $50 million would have a rate of 55%; and amounts greater than $1 billion would have a rate of 65%.
  • Lowering the annual gift tax exclusion from $15,000 each for an unlimited number of donees to $10,000 per donee and $20,000 per donor.
  • Potential elimination of many types of trusts currently used to reduce estate tax liability.

While it is impossible to know if or when this proposed act will become law, or what the actual legislation will be, some form of tax law changes are extremely likely, given that the Democrats control both houses of Congress and the Executive branch.

Watch our blog page for future updates as they occur.

Willi Law Office, LLC has been providing personalized tax and estate planning services to individuals and businesses in Westerville and Central Ohio for over 20 years.