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Ask A CPA - Estate Tax

Estate Tax Rates

If Congress does not agree by the end of 2012, the estate tax is set to revert to pre-2001 levels. As of this date, estate tax rates for 2013 and beyond are set to increase to a maximum of 55% (up from 35% in 2011 and 2012), and only the first $1 million of one’s estate (down from $5.12 million in 2012 and $5 million in 2011) would be exempt. In 2011, For an estate or gift(s) with: Taxable income of $1 but not over $10,000 the tax is $0 plus 18 % over $0 T.I. of $100,000 but not over $150,000 the tax is $23,820 plus 30 % over $100,000 T.I. of $150,000 but not over $250,000 the tax is $38,800 plus 32 % over $150,000 T.I. of $250,000 but not over $500,000 the tax is $70,800 plus 34 % over $250,000 T.I. of $500,000 the tax is $155,800 plus 35 % over $500,000 Any gift tax that you would owe is eliminated or reduced by a tax credit. The credit against taxable gifts for 2011 and 2012 is $1,730,800 effectively exempting $5 million of taxable estates.

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