After remaining unchanged for five years, the amount you can give away to an individual in a single year without reporting the gift on your taxes has increased in 2018.
Under the annual gift tax exclusion for 2018, any person who gives away $15,000 or less to an individual (other than their spouse) does not have to report the gift or gifts to the Internal Revenue Service. This is up for $14,000 in previous years.
If your giving exceeds $15,000, you may not have to pay taxes on those gifts, but you will have to file Form 709, the gift tax return. The IRS lets you give away a total of $5.6 million — $11.2 million for couples — during your lifetime before a gift tax is owed.
This exclusion means that even if you have to file a gift tax return, you’ll only owe taxes if your gifts have gone over the $5.6 million (or $11.2 million) limit in the past.
The tax applies to property other than money. If you give away, say, $15,000 or more worth of stocks, you’d need to report it.
One exception to the rule governing spouses: If your spouse is not a U.S. citizen, you’re limited to giving $152,000 before you’ll need to report it to the IRS.
Also, you do not need to report tax-deductible gifts made to charities on a gift tax return unless you retain some interest in the gifted property.
What about ABLE savings accounts?
Lastly, the amount you can give to an ABLE account has also risen to $15,000. These accounts let people with disabilities and their families to save up to $100,000 for disability-related expenses without jeopardizing their eligibility for Medicaid, Supplemental Security Income (SSI), and other government benefits.
If you have other questions about the gift tax exclusion or ABLE accounts, contact Gummer Elder Law. Our attorneys are happy to work with you to ensure your loved ones get the help they deserve.