Tax Planning

Abstract of tax planning for the tip of 2021

2022 tax new year symbol. Businessman turns wooden cubes and changes the words “Taxes 2021” to “Taxes” … [+] 2022 ‘. Beautiful orange background, copy space. Business, 2022 tax new year concept.


The proposed inheritance and gift tax laws received a lot of press in 2021, but little discussion of content. Here are my recommendations for tax planning strategies for the end of this year through 2022.

The uniform rise in credit inflation

In 2022, the following exemptions will be increased due to inflation:

  • Federal estate tax exemption increases from $ 11.7 million to $ 12.06 million;
  • Generation skipping transfer tax exemption increased from $ 11.7 million to $ 12.06 million;
  • The lifetime gift tax exemption increases from $ 11.7 million to $ 12.06 million; and,
  • Annual gift tax exemption per person increases from $ 15,000 to $ 16,000.

The congress has set itself the goal of reducing this increased allowance. My recommendation is to use them at the beginning of the year when financially possible.

Measures by the end of the year

Update your estate planning records. The estate planning documents should be updated to reflect both the increase in the exemption and the possible decrease in the exemption. Additionally, for residents of states like New York, Massachusetts, and Connecticut with decoupled inheritance taxes, you may need to make changes to your documents to reflect use of the larger federal credits without incurring state death taxes.

Make the maximum annual gift.

As the annual gift tax exclusion increases to $ 16,000, it is possible to gift $ 32,000 per person through a shared gift with a spouse. When gifting, consider giving away assets that are temporarily lower than they were in the past, such as shares in a private company that will appreciate in value in the future.

Submit a gift tax return.

Even if there is no gift tax, it is worth filing a gift tax return to notify the IRS to initiate the statute of limitations. This is especially true if the assets are difficult to value, such as limited partnerships, LLCs, or fractions of real estate. The gift tax return is due on April 15th, but like the income tax return, it can be extended until October 15th.

Make your required minimum distribution from your retirement accounts

If you have retirement accounts and are over 72 years old (previously 70 ½), you should make the minimum required distributions from those accounts before December 31, 2021. The RMD is calculated separately for each account. While financial institutions often do these calculations for you, you are ultimately responsible for making the right distributions at the right time.

Check your beneficiaries.

At least once a year, check who your beneficiaries are and make sure those beneficiaries are listed not only on your wills but also on your retirement accounts, annuities, and life insurance policies.


The future of inheritance and gift tax laws remains uncertain. However, there is a window of time when you can take advantage of the relative safety of gifts immediately before and after the New Year.

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