Happy New Tax Year - Changes in 2009
Tonight at midnight, of course, will be the start of 2009. With the change in the calendar year comes several significant tax changes, most of which I have blogged about prior to today:
- Federal Estate Tax Exemption increases to $3.5 million
- Federal Gift Tax Annual Exclusion increases to $13,000
- Federal Gift Tax Annual Exclusion for Non-Citizen Spouses increases to $133,000
- North Carolina Gift Tax repealed
- Rollover availability from Employer Retirement Plans to Non-Spouse IRAs mandated (beginning January 1, 2010)
- Required Minimum Distributions from retirement accounts suspended
While these changes all favor the taxpayer, keep in mind that unless the law is changed sometime in 2009 or 2010 (when there will be no estate tax), in 2011 the federal estate tax exemption will be only $1 million. Prudent planning for couples with estates over $1 million should include trust provisions to shelter assets from estate tax. Single individuals should consider other planning methods to reduce or eliminate estate taxes. And remember - life insurance proceeds are included in one's taxable estate!
