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3 October 2025

Estate Planning Outlook: 2026 Projected IRS Thresholds And Exclusions

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Farrell Fritz, P.C.

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Farrell Fritz is a full-service regional law firm with approximately 80 attorneys in five offices, dedicated to serving closely-held/privately-owned/family owned businesses, high net worth individuals and families, and nonprofit organizations. Farrell Fritz handles legal matters in the areas of bankruptcy and restructuring; business divorce; commercial litigation; construction; corporate and finance; emerging companies and venture capital; employment law; environmental law; estate litigation; healthcare; land use and zoning; New York State Regulatory and Government Relations; not-for-profit law; real estate; tax planning and controversy; tax certiorari, and trusts and estates.

Each year, the IRS updates tax brackets and related thresholds to reflect inflation.
United States Tax
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Each year, the IRS updates tax brackets and related thresholds to reflect inflation. Under the One Big Beautiful Bill Act, the estate tax basic exclusion amount will increase to $15,000,000 in 2026, with inflation indexing beginning in 2027. Based on Bureau of Labor Statistics data through August 2025, analysts anticipate the following adjustments to key estate planning figures for 2026.

2026 (est.) 2025 Increase
Estate tax basic exclusion amount* $15,000,000 $13,990,000 $1,010,000
Annual exclusion for gifts $19,000 $19,000 $0
Beginning of highest marginal income tax bracket for trusts/estates $16,250 $15,650 $600

International estate planning estimates are projected as follows:

2026 (est.) 2025 Increase
Annual exclusion for gift to non-citizen spouse $194,000 $190,000 $4,000
Covered expatriate – annual net income tax test $211,000 $206,000 $5,000
Covered expatriate – gain exclusion $910,000 $890,000 $20,000
6039F large gift threshold (for 3520 reporting) $20,573 $20,116 $457

The finalized tax rate updates for 2026 are expected to be released by the IRS in late October or early November. A key insight from the current projections is that individuals who have already used up their existing estate tax exemption will likely be able to transfer an additional $1,010,000 — or $2,020,000 for married couples — free of federal transfer taxes.

The full projected report from Bloomberg Tax can be found here: 2026 Projected U.S. Tax Rates Special Report – Bloomberg Tax

*As noted above, this number is statutory and is not an estimate.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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