Unified Tax Credit
Candlefocus EditorThe unified tax credit was introduced by the federal government in the Tax Cuts and Jobs Act as a way to simplify the process of gifting and estate taxes. It is designed to give taxpayers the flexibility to make significant tax free transfers between people to keep wealth within a family. The unified tax credit helps to make gifting easier and less expensive by providing a set amount each year that an individual can gift before any gift or estate taxes apply.
The unified tax credit serves to both simplify the estate and gift tax process and provide individuals with the ability to transfer their wealth without incurring a significant tax burden. The unified tax credit protects wealthy individuals from having to pay too much in taxes when gifting to their heirs or other family members. In addition, the unified tax credit protects those with lower incomes from being overtaxed during the estate and gift tax process.
The unified tax credit is a welcomed form of tax relief that helps individuals to distribute their wealth more easily and with fewer tax implications than before. Increasing the lifetime gift and estate tax exemption for both individuals and married couples filing jointly to higher annual levels provides more people with the opportunity to make tax-free transfers to their heirs and close friends. Overall, the unified tax credit saves individuals and their families thousands of dollars in estate and gift taxes every year.