Happy New Year!
We hope your New Year’s Eve celebrations were more eventful than the recent tax updates which remain unchanged from 2015 for the annual gift tax exclusion of $14,000. The annual gift exclusion is separate and does not count towards the lifetime gift exemption which did change for 2016.
The federal estate tax exemption is now at $5,450,000 per person; up $20,000 from 2015’s applicable exclusion of $5,430,000. That means you may pass on an extra $20,000 tax-free to your loved ones. Fortunately, California does not have state “Death Tax” but there has been an elimination of the allowable State Death Tax Credit in other states when filing Form 706 Estate Tax Return for decedents dying in 2005 and later years.
The Health Savings Account 2016 maximum contribution limits are $3,350 for single person coverage, and for family coverage the maximum contribution is $6,750.
For those diligently planning for retirement, the elective contribution limit for employees who participate in 401(k), 403(b) and 457 plans remains unchanged at $18,000 for 2016.
Now that the holidays are over, let’s get back to business and allow us to address your estate planning and business needs so you can enjoy the rest of 2016 peacefully and successfully.
Noelle R. Minto
N·M Law, APC
Disclaimer: This article is intended to provide a general summary of laws in the State of California and should not be construed as a legal opinion nor a complete legal analysis of the subject matter. Noelle Minto is an attorney at NM Law, APC in Tustin, California, a law firm specializing in Trusts & Estates and Business Transactions.