Gift Tax

The IRS recently announced that the annual gift tax exclusion will stay the same in 2021 at $15,000. If you’re married, each spouse gets an exclusion so a married couple can gift $30,000 to each individual without creating a tax liability or necessity for reporting.

Your annual exemption is per person, so if you have 3 children, you and your spouse together can give each child $30,000, for a total of $90,000 per year. Have grandkids and a lot of money? Give them gifts too!

Note that gifting is not for everyone. For instance, the chance that senior citizens need Medicaid is typically increased and gifting in this instance can disqualify you from certain government benefits. Consult with an attorney before engaging in gifting.