Inflation could end up saving the ultra-wealthy next year nearly $700,000 on the tax that’s imposed on their assets when they die
The IRS has announced more than 60 inflation adjustments to the tax code, including boosts in everything from how much people can put in 401 retirement accounts to the earnings thresholds at which different tax brackets take effect. | Win McNamee/Getty Images.
The hike is coming as a major reduction in the estate tax pushed through by the Trump administration is slated to expire in the next few years. Unless lawmakers act, the amount people can exempt from the levy will suddenly fall by more than half beginning in 2026. “It’s the largest increase we’ve seen in my lifetime,” said Belinda Herzig, senior wealth strategist at BNY Mellon Wealth Management. “I’m very busy.”They can transfer money and other assets to children and other people tax-free while the giver is still alive in order to reduce their exposure to the estate tax when they die.
The increases, dictated by long-standing provisions in the law and set by arcane formulas, come without lawmakers doing anything.
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