- The estate-tax exemption rose to $11.58 million in 2020, $180,000 higher than the year before to account for inflation.
- The current estate tax exemption is set to expire at sunset in 2025, at which time it could revert to the pre-2018 exemption level of $5 million for an individual taxpayer.
- Entrepreneurs can take advantage of higher exemption amounts now with savvy estate-planning strategies in anticipation of the sunset.
Owners of large estates have reason to celebrate. For the second year in a row, the estate-tax exemption has increased to keep up with inflation, offering families with substantial assets the ability to shield a bigger portion of their estates from estate tax.
For 2020 the Internal Revenue Service raised the estate tax exemption to $11.58 million per individual, or $23.16 million per couple. A provision of the Tax Cuts and Jobs Act of 2017 more than doubled the exemption and raises it each year to keep pace with inflation.