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Archive for November 6th, 2019

IRS Releases 2020 Inflation Adjustments

Posted by taxguru on November 6, 2019

IRS has done its official calculations of the adjustments that will be required for more than 60 tax provisions in the year 2020.

Their Press Release:  IRS provides tax inflation adjustments for tax year 2020

All of the juicy details are in this 28 page PDF of Revenue Procedure 2019-44

 

Gifting Exclusion

The Number One question I constantly receive regarding these IRS inflation adjustments has to do with the annual exclusion from Gift Tax reporting because many people structure their estate plans based on gifting the maximum each year.  Unlike most of the other inflation adjusted provisions, which do increase every year, the amount of the annual Gift Tax exclusion is only allowed to increase when the cumulative inflation factor warrants an increase of a full $1,000.  This does make a lot of sense.  Otherwise, the exclusion amount would be very odd, not round, figures that would be very confusing to keep track of.  For 2020, there will be no increase in the annual Gift Tax exclusion.  It will remain at $15,000 per donor (giver) per donee (recipient).

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