IRS announces bigger estate and gift tax exemption for 2027

The IRS raised the federal estate and gift tax exemption to $15.5 million per individual for 2027, up from $15 million in 2026, with the figure set to be formally announced alongside the agency's annual inflation adjustments. The increase reflects inflation indexing and allows wealthy individuals and families to shield more assets from the 40% federal estate tax. The change matters because the exemption had been set to roughly halve after the 2025 tax law overhaul, and the new figure confirms the higher threshold remains in place. Married couples can effectively shelter about $31 million under the combined exemption. Advisors will be watching whether Congress makes further adjustments and how clients use the higher limit for gifting and estate planning before any future legislative changes.