If you want to give monetary gifts to your family, there are ways to minimize gift taxes and save money. More specifically, certain wealth transfers are excluded from the gift tax and are fully tax-free lifetime wealth transfers. The yearly gift tax exclusion is $14,000 for individuals and $28,000 for couples; if you or an individual spouse exceeds these limits, you must file a Form 709 gift tax return. For the lifetime exemption, the limit is $5.45 million for an individual and $10.9 million for a couple—as long as your lifetime gifts do not exceed these amounts, they cannot be taxed. When giving to a 529 Tuition Plan, you can give up to $70,000 in one year, using the exclusion value of five years, but you must wait four years before giving that individual another gift. Also, you may give an unlimited amount of tuition to the institution as opposed to giving it straight to the individual attending school.
See Kansas & Missouri Estate Planning Blog, What Should My Clients Know About Gift Taxes?, Wealth Management, August 4, 2016.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
