What if I give more than the gift tax limit?

If you give more than the annual gift tax limit, you may have to file a gift tax return, but this does not necessarily mean that you'll owe taxes on the gift. The 2024 annual gift tax exclusion is $18,000. Sending a $20 bill with a graduation card? No need to sweat the federal gift tax.

How much tax do you pay on a gift?

Taxpayers typically only pay gift tax on the amounts that exceed the allotted lifetime exclusion, which was $12.92 million in 2023 and is $13.61 million in 2024. Gift tax rates range from 18% to 40%. Of course, there are exceptions and special rules for calculating the tax, so check the instructions for IRS Form 709 for all the details

Do you owe tax on a gift?

A gift tax is a tax that can be imposed on the transfer of money or property from one person to another. If you give more than the annual gift tax limit, you may have to file a gift tax return, but this does not necessarily mean that you'll owe taxes on the gift. The 2024 annual gift tax exclusion is $18,000.