Happy Holidays! The 2018 Gift Tax Exclusion Is Heading Higher
The holidays are coming up, and most people are starting to think about gift-giving for the season. Yet what many people don't realize is that technically, gifts you give for birthdays, holiday festivities, weddings, or just everyday occasions are potentially subject to gift tax from the IRS. In fact, it's only because of one provision known as the annual gift tax exclusion that most people don't have to deal with filing gift tax returns year in and year out. In 2018, the annual gift tax exclusion is slated to go up to $15,000. While that might be well out of the price range for most people, those who have major estate planning issues will welcome the added flexibility compared to 2017's annual gift tax exclusion amount of $14,000.
Most people never have to worry about actually paying gift tax because of two provisions of the tax code. The annual gift tax exclusion is the more important of these, because people take advantage of it all the time and it relieves you of having to file any paperwork or do any other cumbersome accounting.
With the annual gift tax exclusion, you're allowed to give money or property with up to $15,000 for 2018 without having to file a gift tax return or pay any gift tax. The $15,000 amount is the maximum you can give to any one person, but you can make multiple $15,000 gifts to different people and still get an exclusion for each.
Source: Fool.com
