Give the gift to spouses. Excess gifts require a tax form but not.
Report any amount that exceeds the per person gift of 15 000 on form 709 and submit it with your annual tax return.
How to gift money without paying taxes. Cash gifts up to 15 000 per year don t have to be reported. The general rule is that any gift is subject to the federal gift tax. In general these are the basics you need to know about cash gifts and cash payments.
Spread the gift out between years. So long as you keep the value of your gift below 15 000 per person you are free to gift to an unlimited number of people and will not have to report it or worry about paying any gift tax. The key to avoiding a gift tax is to give no more than the annual exclusion amount to any one person in a given.
For 2017 the threshold for the kiddie tax meaning the amount of unearned net income that a child can take home without paying any federal income tax is 1 050. For example in 2019 you may gift 15 000 to your son and 15 000 to your son s wife for a total of 30 000 without paying gift tax. Double or quadruple your limit.
Because taxpayers must file individual gift tax returns spouses cannot file a joint gift tax return. The gift tax is not an issue for most people the person who makes the gift files the gift tax return if necessary and pays any tax. So you can give up to 15 000 to one person while making another 15 000 gift to someone else all without triggering.
However there s an important exception to this rule you can give up to 15 000 per person during the year without having to. Pay medical bills or tuition directly. Even if you do not owe gift taxes on the monetary gifts you made you still have to file irs form 709 if you exceed the yearly limit of 15 000 per person.
3 easy ways to avoid paying a gift tax. Just as spouses may double the size of a gift by giving it together so may you double the size of a gift by giving it to a married couple. If someone gives you more than the annual gift tax exclusion.
The annual exclusion amount applies to each recipient of a gift from a donor.