Navigating Changes in Estate and Gift Taxes: A Resourceful Guide for CPAs
Estate and gift taxes are subjects of persistent discussion in Congress and the popular press, with significant implications for financial advisors and their clients. The Tax Cuts and Jobs Act (TCJA, PL 115-97), enacted in 2017, temporarily boosted the lifetime exclusion and annual gift exclusion, impacting estate and gift tax strategies. As the year 2025 approaches, bringing the potential sunset of these provisions, certified public accountants (CPAs) may wish they had a "crystal ball" to predict future tax laws. While forecasting remains elusive, we can explore invaluable federal and state resources that CPAs can use to assist clients in estate tax planning.
Understanding the IRS Estate and Gift Taxes
The Internal Revenue Service (IRS) serves as a primary authority on estate and gift tax matters, and it offers a comprehensive landing page dedicated to these topics.
IRS Resources Overview
The IRS Estate and Gift Tax page provides an organized collection of resources that cover various aspects of estate and gift tax provisions, including topics pertinent to non-residents with U.S. estate and gift tax obligations. The main page provides essential definitions and explanations, such as the concept of "gross estate," allowable deductions, and the taxable estate.
To file estate taxes, the critical Form 706 is required if the decedent’s taxable estate exceeds the threshold of $13,610,000 for the 2024 tax year. This form’s instructions can be conveniently accessed via the IRS website, with the Form 706 instructions linked directly on the estate tax main page.
In addition to informational resources, the IRS also offers a list of updates on the estate and gift tax laws through a dedicated section that clarifies recent changes, such as obtaining an Estate Tax Closing Letter and updates regarding mailing addresses for returns. One should also check the current Basic Exclusion Amount and annual gift tax exclusion tables to keep track of the thresholds that affect estate planning strategies.
Frequently Asked Questions
Another useful section is the frequently asked questions on estate taxes. This resource addresses important topics including filing requirements, the procedure for amending returns, and how to make electronic payments. It is particularly helpful for CPAs working with executors navigating tax filings after a loved one’s passing. The IRS also offers guidance specific to non-residents and their unique tax implications for U.S. situated property.
Leveraging Findlaw for Estate Planning Insights
Findlaw is a robust resource that provides free access to articles, primary source law, legal cases, and tools related to estate planning. Organized into various categories such as estate administration, wills, trusts, and estate tax law, Findlaw serves as a valuable tool for CPAs who may not specialize in estate taxation.
Key Features of Findlaw
The Estate Tax Law section presents an overview of estate taxes and links to articles that discuss reducing estate taxes. For CPAs, the information regarding the 12 states with estate taxes and the six states with inheritance taxes is particularly important due to varying state laws.
Further resources, such as 10 Ways to Reduce Estate Taxes, discuss strategies including lifetime gifts, marital transfers, and the use of family limited partnerships, which can be crucial for tax-efficient estate planning.
Professional Firms Offering Resources
In addition to the IRS and Findlaw, there are several professional firms providing valuable resources tailored to estate planning:
Center for Financial Planning
The Center for Financial Planning offers a variety of free resources related to financial and estate planning. On their Estate Planning page, downloadable documents such as a Letter of Last Instruction and a Personal Financial Record System are available. They also provide educational materials, including webinars discussing current estate tax environments, helping CPAs stay informed about best practices.
Estate Planning Law Center
The Estate Planning Law Center specializes in estate and tax planning, offering informative blogs and workshops. Their content often includes practical advice, such as the implications of providing adult children with an "advance" on their inheritance—a scenario that can lead to family disputes or financial mismanagement.
Conclusion
As discussions around estate and gift taxes continue to evolve, CPAs can leverage multiple resources to provide clients with informed estate tax planning services. Engaging with essentials from the IRS, comprehensive insights from Findlaw, and diverse offerings from professional firms ensure that accountants are well-equipped to navigate the complexities of estate and gift taxation. The evolving landscape of these taxes highlights the importance of timely information and planning strategies, reinforcing the need for ongoing education and resourcefulness in this critical area of financial oversight.
Susan B. Anders, PhD, CPA/CGMA, serves as the Louis J. and Ramona Rodriguez Distinguished Professor of Accounting at Midwestern State University, enriching the academic and financial advisory landscape with her expertise.
