Gift taxes -Do you think your gift is taxable?

            According to IRS, if you are receiving the gifts from the another individual and in turn you aren’t 

            paid back, at least not fully , then it’s a gift.But, if you are giving another individual a lot of 

            money then you might have to pay a federal gift tax.

            Who pay the Gift Tax?

            ● Paying the gift tax is usually the responsibility of the giver.But only if you give gifts 

            above certain amount then it is taxable else most of the gifts given by the individuals are 

            tax -free.

            What is the limit of receiving and giving gifts without reporting to IRS?

            ● The annual amount that can be excluded from being gift taxed is $14,000. If you give any 

            gift above $14,000 in a year then the difference is taxable gifts.

            ● Also,every individual gets the lifetime exemption of giving gifts up to $5.43 million 

            without owing taxes.

            ● For, married filing jointly the the lifetime exemption is $10.9 million.

            What gifts are excluded from gift tax?

            ● The gifts exempted from the federal tax are:

            1. Gifts given to spouse.

            2. Gifts given to the IRS approved charities.

            3. Gifts covering the medical or tuition of someone.

            How to report Gift tax to IRS?
            ● If you give away the gifts more than $14,000, then you are required to file the form 709 

            with the IRS. Then gift tax return is due by April 15 , the same due date as the form 1040.

            ● Although you won’t actually owe any gift tax until you exceed your lifetime limit of 

            giving $5.43 million.

            Remember, giving  gifts is not considered as a deduction on anyone’s return. If you failed to pay 

            gift tax to IRS then you will be end up paying the penalties.
            Updated: 17 Mar 2016 11:56 AM
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