What’s New

HSA Contributions

An eligible individual who has not attained age 55 by the end of the taxable year may deduct the

contributions he or she makes to an HSA during 2016 in an amount not to exceed:

 $3,350 for account holders with self-only coverage; or

 $6,750 for account holders with family coverage.

Additional Contributions for Age 55 and Older Account Holders

HSA account holders who attain age 55 before the close of a taxable year are eligible to make an additional contribution. The maximum additional contribution amount is $1,000.

Estate tax, Gift tax and General-skipping transfer (GST) tax’s exclusion amount: The federal estate tax will be imposed on estates that exceed $5,430,000 in 2015, $5,450,000 in 2016 and $5,490,000 in 2017. The federal gift tax will be integrated with the estate tax the exclusion amount for 2016 is $5,450,000 and 2017 is $5,490,000. For GST tax, the indexed exclusion amount for 2016 is $5,450,000. Beginning January 1, 2011, estate of decedents survived by a spouse may elect to pass any of the decedent’s unused exclusion to the surviving spouse. This election is made on a timely filed estate tax return for the decedent with a surviving spouse.

If the decedent is a U.S. citizen or resident and decedent’s death occurred in 2016, an estate tax return (Form 706) must be filed if the gross estate of the decedent, increased by the decedent’s adjusted taxable gifts and specific gift tax exemption, is valued at more than the filing threshold for the year of the decedent’s death. The filing threshold for 2017 is $5,490,000 and for 2016 is $5,450,000. An estate tax return also must be filed if the estate elects to transfer any deceased spousal unused exclusion (DSUE) amount to a surviving spouse, regardless of the size of the gross estate or amount of adjusted taxable gifts. The election to transfer a DSUE amount to a surviving spouse is known as the portability election.

An estate tax return may need to be filed for a decedent who was a nonresident and not a U.S. citizen if the decedent had U.S.-situated assets

Annual Gift exclusion: The gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether the donor intends the transfer to be a gift or not. The gift tax applies to the transfer by gift of any property. You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return. If you sell something at less than its full value or if you make an interest-free or reduced-interest loan, you may be making a gift.

 The annual exclusion from the gift tax for 2013-2017 is $14,000 (you and your spouse can give $28,000 together).