Learn Different Aspects of Gift Taxes in the US

Do you have any idea about gift taxes in the US? Learning about taxation is difficult, but we will try to find out a few important aspects regarding gift taxes, taking financial responsibility, and managing everything in the right way.

Once you understand the concept of gift taxes, you can decide how to gift something to a person without complicating the tax aspects. You can also hire tax relief lawyers for help. These professionals will check your situation and then offer you the best service possible.

Basics of Gift Taxes That We Need to Know

When you transfer money or property to another person without any exchange of money, it is called a gift. Here are some of the important aspects that you need to know about-

1. As per law, every individual has an upper limit up to which they can gift without any taxation. As of 2024, the amount is $18,000. When the amount is over that amount, you have to pay gift tax.
2. There is an upper limit to the lifetime gift exemption. Currently, the amount is $13.61 million. The total gift you will receive in your lifetime shouldn’t surpass this amount.
3. When the amount of the gift is over the decided amount, you have to pay taxes on the extra amount. The rate of interest is from 18 to 40%.
4. You should also remember that when you gift something to your spouse or to a charity, the gift tax rule is not available there.

Aspects That We Need to Know About Gift Taxes

Without having enough information about gift taxes, we might make some major mistakes-

1. One major question we often ask that who will pay the tax? As per the law, the person giving the gift is responsible for paying gift taxes.
2. Whenever the amount of a gift exceeds the limit, we must report the IRS using Form 709.
3. A few states are there that levy different gift taxes. You need to have an idea about these aspects for better results.
4. Use of gifts can reduce your taxable estate. Find an irs tax audit attorney who can help you manage these aspects.

Tips That Might Help to Manage Gift Taxes

After discussing with experts, we have come up with a few tips that might help you in the process-

1. Distribution of gifts can lower the yearly limit, and you don’t have to pay any taxes.
2. Couples can count the gift money separately so that the limit doubles itself.
3. Keep necessary documents related to any particular gift. You might need them in the future.
4. When you pay for education or medical expenses directly, it falls under gift.
5. Hiring a professional financial advisor would be the best choice for any individual.

Help You Can Have Regarding Tax Planning

A number of professionals are available in the US who can help you. Certified accountants can help you with proper tax collection. If you are dealing with tax issues, consultation with professional tax attorneys will be effective.