For those in the business world, understanding the estate tax threshold can be confusing and often intimidating. What Is it? How does it impact businesses?
The estate tax threshold is the amount of money (assets, property, etc.) an individual can leave to their heirs without having to pay any estate tax. This includes real estate, personal property, all types of investments, and other forms of property such as money in a bank account.
The current estate tax threshold is $11.2 million for individuals and $22.4 million for married couples filing jointly. This means that an individual can leave up to $11.2 million to their heirs without incurring any estate tax, and a married couple can leave up to $22.4 million to their heirs without having to pay any estate tax. Any assets over the threshold will be subject to a 40% estate tax.
How Will the Estate Tax Threshold Impact Businesses?
The estate tax threshold is an important consideration for businesses when it comes to estate planning because it can impact their ability to pass on valuable assets to their family members and other heirs. Business owners may want to structure their affairs in such a way that allows them to maximize the value of their estate. This may include taking advantage of current tax laws, utilizing trusts, and other strategies.
Business owners should be aware of the estate tax threshold and how it impacts their situation. Consulting a financial professional can help them plan in a way that maximizes the value of their estate while minimizing the amount of taxes they and their heirs will have to pay.