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Look ahead toward bigger tax breaks

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in Small Business Tax

There’s a silver tax lining in the recent spike in inflation. Several tax breaks that are indexed for inflation will benefit from a significant boost in 2009.

The annual $12,000 gift-tax exclusion will increase to $13,000 next year. Thus, a married couple will be able to give gifts of up to $26,000 to a recipient completely free of any adverse federal gift or estate tax effects. The personal exemption amount will jump from $3,500 to $3,650, an increase of $150. So a married couple with three dependent children can deduct an extra $750 (5 x $150).

Caveat: These are projections based on the latest data. The IRS will release the official figures before Dec. 15.  

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