IRS TAX LIMITS 2025

The federal estate tax exemption is rising from $13,610,000 to $13,990,000 for those who pass in 2025. This means that if your total net worth is less than $13,990,000 in 2025 and you pass (if you have not used part of that exemption during life) your estate will owe $0 in federal estate taxes.

Remember, this is the last year the federal estate tax exemption will rise based on a $10,000,000 base indexed for inflation. On January 1, 2026, the federal estate tax exemption will decrease to a $5,000,000 base indexed for inflation.

Remember, you are allowed to gift up to $13,990,000 by December 31, 2025 without paying any gift tax during life (you'll just be out of exemption at your passing and your estate will pay approximately 40% of every dollar of your net worth that you haven't gifted away during life).

In addition, the IRS annual exclusion limit will rise from $18,000 per person/per year in 2024 to $19,000 per person/per year in 2025. This means that any person can gift up to $19,000 to any other person during 2025 without having to file a gift tax return or pay a gift tax.