Do you want to give your children or grandchildren some gifts each year to reduce your estate, help them with a house or educational expenses but
don't want to pay taxes?
The 2023 annual gift tax exclusion is $17,000.00 per person, so you can give that amount to each of your children.
But wait. There's more!
If you're married you can give even more - see below.
A husband and wife can therefore gift $34,000.00 per child and, if they wish, to each grandchild. This gift is not tax deductible to you but is also not taxable for income tax purposes to the recipient. And, if you're paying tuition bills directly you can give even more - see below.
If you're going to give the $17,000.00 and pay for tuition, you must pay the school directly.
Whether your gift is to a child or grandchild, if your gift is at or below this $17,000.00 amount, no gift tax return is required.
For gifts above that amount, a gift tax return may be required but each person currently also has a lifetime exemption of $12.92 million before they must begin to pay tax.
You can also make gifts to people other than family members too.
And, to make matters more complicated, you can also use your non renewable federal estate tax exemption of up to $12.92 million per individual donor. In short, if you want to help a child to buy a house, form a business, or do anything else, you and your attorney should be able to find a perfect strategy.
For more information on gifting to children and grandchildren see our videos on this page or if you live in Pennsylvania call 610-933-8069 for a telephone consultation on gifting.
