Avoiding the Gift Tax

IRS will allow gifts of up to $14,000 per individual per year with no tax consequences. If you happen to be married, that would mean that you and your spouse could gift $28,000 a year to a single individual if you could afford to be that generous.

Another great break is to pay for someone’s tuition or medical expenses. If the checks are written directly to the school or the medical institution, those sums do NOT count against the amount of money you are allowed to give to that individual for the year with tax consequences.

Gifts over those amounts will require a gift tax return, but rarely result in an actual tax due. Generally it just reduces the amount you are ultimately allowed to leave to your heirs tax free (likely 1 Mill, depending on Congress).

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