The estate tax for 2017 has increased from 2016’s rate of $5.45 million to $5.49 million per individual. This means that an individual can leave $5.49 million to heirs and their estate will pay no federal estate or gift tax. Married couples double their exemption and can leave $10.98 million before their estate is taxed. Because the federal estate tax has been fixed at $5 million and adjusted each year for inflation, since the passage of the 2010 Tax Relief Act, only about two of every 1,000 estates face an estate tax.
The annual gift exclusion remains the same as it has been since 2014 – $14,000 per year. Essentially, an individual can give away or “gift” up to $14,000 to as many people as you would like without incurring a tax based on that gift. Additionally, the lucky recipient typically owes no taxes.