Estate and Retirement Planning Changes in 2015

Estate and Retirement Planning Changes in 2015

A new year often brings changes to retirement and estate planning tax laws. 2015 is no different. Knowing about these updates will help you adequately take advantage of deductions and credits, as well as effectively manage your retirement planning and possible estate/inheritance tax burden.

Here are some of the most important estate and retirement planning updates for 2015:

Estate taxes

The federal estate tax exemption increased $90,000, from $5,340,000 in 2014 to $5,430,000 in 2015. The estate tax rate for assets held above the new exemption amount will remain at 40 percent. Remember that starting in 2011, a deceased spouse’s unused estate and gift tax exemption is portable and can be used by the surviving spouse.

Also note that Tennessee has a separate inheritance tax for estates with a total value exceeding $5 million in 2015. Unless new legislation is passed, the Tennessee inheritance tax will be eliminated in 2016.

Gift tax

The gift tax annual exclusion will remain at $14,000 per recipient in 2015. The “annual exclusion” is the amount that you may give to someone without counting toward your lifetime gift exemption of $5,430,000. If you decide to give more than the annual exclusion in a single year, the amount over $14,000 will be factored in to reduce your lifetime exemption amount. You and your spouse can give up to $28,000 (per recipient, per year) without impeding your lifetime exemption amount.

Generation-Skipping Transfer (GST) tax

Like the estate and gift tax, the GST tax exemption increased to $5,430,000 in 2015. However, unlike the estate tax, the GST tax exemption is not portable to the surviving spouse.

Dividends and long-term capital gains

The 2015 tax rates will remain the same as 2014, but threshold amounts are indexed for inflation. For individuals in the 15 percent tax bracket or under, the tax on dividends and long-term capital gains will remain at 0 percent. Individuals in the 25, 28, 33 or 35 percent tax brackets will be taxed at 15 percent. Those in the top tax bracket of 39.6 percent will continue to be taxed at a rate of 20 percent.

401(k) and 403(b)

The contribution limits for these retirement accounts increased to $18,000 with a $6,000 catch-up contribution for those over 50. That’s $500 over the 2014 limits. You can turn 50 anytime during 2015 to qualify for the catch-up provisions.


Beginning in 2015, you are limited to one rollover a year. You can no longer take funds out of one IRA, hold onto it for 60 days or less, and place it in another IRA more than once a year. Trustee-to-trustee transfers are not affected. Also, depending on the type of IRA you have, contribution limits may have increased in 2015.

  • Traditional IRA: Contribution limits remain the same ($5,500 plus a $1,000 catch-up for those over 50).
  • Roth IRA: Contribution limits remain the same ($5,500 plus a $1,000 catch-up for those over 50), but the earned income limitations to determine if you can contribute to a Roth IRA have been updated. Here are the thresholds that will help determine if you can make a full, partial or no contribution. They are also dependent on your tax filing status.

Tax Filing Status

Earned Income



Married Filing Jointly


Married Filing Separately


  • SEP IRA: Contribution limits rose from $52,000 in 2014 to $53,000 (whichever is less: $53,000 or 25 percent of participant’s compensation) in 2015. Maximum compensation limits also rose from $260,000 to $265,000.
  • SIMPLE IRA: Employees may now defer up to $12,500 (lesser of $12,500 or 100 percent of participant’s compensation) in 2015, plus a $3,000 catch-up contribution for those 50 or older.
  • myRA: This retirement vehicle, intended for low- and middle-income Americans who may not have access to employer-sponsored accounts, debuted in 2015. It will function much like a Roth IRA but will invest primarily in investments backed by the U.S. Treasury.

Many estate planning documents are drafted to be flexible and should be unaffected by increased exemption amounts. Even so, you may want to review your plans to reflect these changes. Please consult a trust or tax advisor for advice about your specific situation.

Ryan Miller can be reached at 615-904-3434 or

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