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Taxes Binder

BIG Tax Hits on Wealthy When Law Sunsets in 2025

In 2017, Congress passed the Tax Cuts and Jobs Act (TCJA). The Tax Cuts served as the largest overhaul to the U.S. tax code in decades. Many Americans enjoy the tax benefits of this legislation. But many of the key provisions were temporary and set to expire or sunset at the end of 2025. These Tax Cuts will expire unless Congress intervenes. Given the uncertainty and climate in Washington, we cannot count on Congress passing new legislation to extend these tax cuts for America’s wealthiest families.

The 2026 changes will be substantial for most Americans and even more so for business owners, farm owners and Americans with significant wealth. Goosmann Law can help clients put more advanced estate plans in place before the sunset. Many of the advanced plans take time to develop and implement. Waiting on Congress and getting too close to the sunset of the law will not allow for proper planning. The time to act is now.

Lifetime Gift and Estate Tax Exemption

Who is affected? Individuals with at least $5 million in net worth or couples with at least $10 million in net worth. Younger taxpayers who have high income(s) and/or high asset growth potential with a current individual net worth of $3 million (or $6 million as a couple) may also be affected as their estates grow in the future.

What’s changing? With the enactment of the TCJA, the lifetime gift and estate tax exemption doubled and today the lifetime gift and estate tax exemption is set to $13.61 million for individuals and $27.22 million for couples. Once the sunset takes effect, the lifetime estate and gift exemption will be cut in approximately half. The value of an estate that exceeds the applicable exemption amount is subject to a flat tax of 40 percent, while amounts below that threshold do not incur tax at all.

If you are an individual or part of a couple with substantial wealth and believe you may be affected by this tax change, we can’t stress enough that now is the time to begin planning. And here’s why:

  1. Potential to save millions – With the lifetime estate and gift tax exemption currently set at an all-time high, there is an opportunity to potentially save millions in estate transfer taxes by acting before the sunset.
  2. The clock is ticking – The sophisticated estate plans required for those with substantial wealth can take 12 to 18 months to design, plan, and execute. Less than 24 months remain until the sunset takes effect.
  3. “Use it or lose it” opportunity – This is truly a “use it or lose it" opportunity that is unlikely to be available in the future. Unless you believe Congress will extend these tax benefits on the wealthy, you do not want to lose out on saving your family millions of dollars when you pass away and have the government take 40% of your wealth above the exemption amounts.

About Goosmann Law Firm

Goosmann Law Firm is the largest certified woman-owned law firm in the Midwest for trailblazers leading the way. They are one of the fastest growing law firms in the United States with locations in Omaha, Nebraska, Sioux City, Iowa, Spirit Lake, Iowa, and Sioux Falls, South Dakota. Their clients range from local businesses to multinational Fortune 100 companies. Their areas of practice include Business, Estates, Employment, Disputes and Trials. Goosmann Law Firm is a proud member of the National Association of Minority and Women Owned Law Firms. To learn more about the Goosmann Law Firm, visit their website at or call (855) 843-4531.