Goodbye 2021, Hello 2022

Margaret A.M. Heine

is the principal counsel at Heine Law Group in Fullerton, California. She is licensed in California and Washington and has authority to practice before the Supreme Court of the United States and the United States Court of International Trade.

Her practice includes estate planning, wills, trusts, and probate as well as business, real estate, and civil litigation. Email: or visit company website

Goodbye 2021, Hello 2022

There is still time to take advantage of year end estate planning savings.  Here are the best tidbits to know.

Gift & Estate Taxes and Exclusions:

In 2021, the federal estate tax exclusion is $11.7 million dollars per individual. That would be $23.4 million dollars per couple.  In 2022, the exclusion increases to $12.06 million per individual or $24.12 million per couple.  This is a lifetime exclusion, and is typically used when an individual dies. It was initially increased to allow families to pass wealth between generations, and usually that was in the value of real estate or in some cases fast rising stock market values. These numbers are under scrutiny and may change sometime in the future under the guise of taxing the rich and eliminating the accumulation of wealth between generations.  There are times when this exclusion is used during a persons’ lifetime, but doesn’t need to be with good planning.

In 2021, the gift tax exclusion applies to all gifts of $15,000 or less per individual recipient.  The giver may give as many $15,000 gifts as they desire to as many people as they desire, but any gift over $15,000 to an individual needs to be reported to the IRS through a gift tax return.  If the gift is $15,000 or under, no gift tax return would be required.  There is no reporting of the gift by the giver or the beneficiary.  If the gift is over $15,000, then a gift tax return is required and the gift will be counted against the givers estate tax exclusion applicable at the time.  So, in theory, a person could give away a total of $11.7 million this year to one person or multiple persons exceeding $15,000 each, and neither person would have an income tax consequence as a result of the gift, however, when the giver dies, there would be no tax exclusion available to apply against the estate.

Spouses each have the right to make gifts in the exclusion amounts.  So, husband could give $15,000 to a child, wife could give $15,000 to a child, and it would be exempt from income taxes as the gift does not exceed the yearly exemption per gift.  This is also a good way to accumulate college funds, Roth IRA’s, and other types of accounts.

In 2022, the gift tax exclusion raises to $16,000 per year per person per giver.  These are just general rules and do not constitute legal advise.  As always, it is recommended that you discuss your estate plan with your accountant and/or attorney to make sure that you are using the most up-to-date IRS regulations and rules and estate tax laws for your state.

Charitable Donations

The 2020 Coronavirus Aid, Relief, and Economic Security Act (CARES) 15 USC 9001 provides for a special deduction for charitable contributions in 2021.  Under the CARES Act, even if a person does not file their tax return with itemized deductions, they may take a special deduction for making charitable donations in the amount of $600 per couple or $300 per individual as long as the donation was in cash or for volunteer expenses.  It cannot be used for donations of clothing or furniture.  It also raises the deductibility level of cash donations to up to 100% of your income, which is up from 61% of your income.  This allowance is charity specific and only certain qualified charitable donations qualify.  Again, if you want to maximize this provision, discuss your plans with your tax advisor or attorney for the most up-to-date information and more specifics.

Required Minimum Distributions

Yes, all required minimum distributions need to be taken by December 31st.  You must start taking required minimum distributions (RMD) in the year you turn 72.  This can be delayed to April 1st following your 72nd birthday.

RMD’s are based on each individual account and actuary tables, amount in the account, etc.  There are special rules which may allow taking from one account instead of multiple accounts as long as the full RMD is taken.  Once again, consult with your accountant regarding calculation and specific rules application to your situation.

Along with RMD age increase, there is a corresponding increase in the amount of contributions which can be made to 401K’s to $20,500 in 2022.

Legal changes for 2022 of general interest:

Minimum wage of $15/hour goes into effect on 1/1/2022 for companies with more than 25 employees.

End of Life Option Act (Physician Assisted Death) is changing for those people with less than 6 months to live.  The waiting period for requesting the medication necessary is reduced to 48 hours from 15 days, and also eliminates the patient from having to make a written attestation with 48 hours of taking the medication.  The charges were implemented to further help those in critical condition to provide death with dignity.

Emotional Support Animals are not Service Animals.  AB468 puts requirements on the sale of equipment, letters, animal gear that requires sellers to inform purchasers that Emotional Support Animals are not Service Animals and are not entitled to the same exceptions as Service Animals.  It also puts controls on who can issue letters required to make an emotional support animal necessary.  Landlords can require a verified letter by a legal provider who identifies their license number, type of support supplied, scope of their license, their relationship with the owner of the animal and attest the relationship is longer than 30 days.  The landlord cannot charge a separate deposit for an emotional support animal, if the letter is provided, and it is in accordance with the requirement of the law.

There is still time to act to take advantage of the 2021 tax breaks.  2022 will bring additional changes and require additional planning.  As the old saying goes, it is always better to be prepared!

Goodbye 2021 and Welcome 2022!

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