5 Things You Need to Know About Estate Taxes in 2025
As a new year–and a new presidential administration–approaches, it is important to take stock of where things stand with respect to the estate tax. While many Washingtonians will never have to worry about actually leaving an estate large enough to trigger a tax obligation, it is still worth noting the coming changes to the law in 2025, as well as where things may be headed beyond that.
With that in mind, here are four things to know about estate taxes in 2025:
- The Federal Exemption Will Be Higher
The federal estate tax only applies to estates over a certain amount. This amount is the federal estate tax exemption and it is adjusted annually. For estates of persons who died this year (2024), the exemption is $13,610,000. The IRS recently announced the exemption will increase for estates of persons who die in 2025 to $13,990,000.
- Washington’s Estate Tax Exemption Remains the Same
In 2024, Washington is one of just 12 states that impose their own estate tax. Unlike the federal estate tax, the Washington estate tax exemption has remained static since 2018. The state exemption is $2,193,000, which applies regardless of whether a person dies in 2024 or 2025. While this exemption has not changed in some time, home values and assets have certainly risen for many causing more residents to be concerned about this estate tax.
- The 2017 Federal Estate Tax Exemption Rules Are Set to Expire
The current federal estate tax exemption is based on a 2017 law, the Tax Cuts and Jobs Act (TCJA), which doubled the exemption from $5,490,000 in 2017 to $11,180,000 in 2018, and provided for annual increases culminating in the 2025 exemption of $13,990,000. The TCJA is set to expire at the end of 2025, however, absent new legislation, the federal estate tax exemption will revert in 2026 to a base level of $5 million with adjustments for the rate of inflation. With President Trump and Republican Law makers assuming control come January, they will certainly be evaluating how an extension of the TCJA might impact overall budget considerations.
- The Time to Start Estate Tax Planning Is Now
Given the politically volatile nature of the estate tax, it can be difficult to keep up with the current state of the law in this area. That is why it is critical to work with a qualified Spokane estate tax lawyer who can help you start planning now. Contact Moulton Law Offices, P.S., today to schedule a free consultation. We serve clients throughout the Spokane Valley, Kennewick, and Yakima area.
