The IRS has announced the values for 2023 of various tax items that are indexed annually for inflation. In general, values have been adjusted upward about 7.0%.
Of particular interest to gift planners, the unified gift and estate tax exemption amount will be $12,920,000 ($25,840,000 per couple) in 2023, an increase from $12,060,000 ($24,120,000 per couple). So, next year a couple that takes advantage of the portability of unused estate tax exemption will be able transfer nearly $26 million to heirs without triggering any federal estate tax.
For the second year in a row, the annual gift tax exclusion will also increase, from $16,000 per person ($32,000 per couple) this year to $17,000 per person ($34,000 per couple) next year. For example, in 2023 a married couple with two children will be able to give each of them $34,000, $68,000 in total, without making a taxable gift.
Also of interest, the standard deduction in 2023 will increase to $27,700 for married couples filing jointly and to $13,850 for single filers, an increase of $1,800 and $900, respectively. Taxpayers who are 65 or older will qualify for an additional $1,500 in standard deduction on top of that (an additional $1,850 if single and not a surviving spouse).
See Revenue Procedure 2022-38 for complete details, including all federal income tax schedules for 2023.