Gift Tax and Annual Exclusion Planner
Example: Total you want to give away: 150000 $ · Number of gift recipients: 4 · Years over which you will give: 3
| Giftable under annual exclusion (no Form 709) | $150,000 |
| Total annual-exclusion capacity | $216,000 |
| Amount above exclusion (uses lifetime exemption) | $0 |
| Annual gift per recipient (exclusion amount) | $18,000 |
Worked example
Giving $150,000 to 4 family members over 3 years: annual exclusion capacity = $18,000 × 4 × 3 = $216,000 — enough to cover the full $150,000 with zero gift-tax filings required. Had you given $150,000 in one year to one person, $132,000 would have exceeded the exclusion and required a Form 709, using $132,000 of your $13.61M lifetime exemption. Same dollars — completely different paperwork.
Frequently asked questions
What is the annual gift tax exclusion for 2024?
$18,000 per recipient, per year. This amount is indexed to inflation and adjusts periodically. You can give $18,000 to an unlimited number of people each year without filing a gift tax return. Married couples can combine to give $36,000 per recipient ('gift splitting').
What is the lifetime gift and estate tax exemption?
$13.61 million per individual in 2024 ($27.22M for married couples). Gifts above the annual exclusion reduce this exemption dollar-for-dollar. If your total lifetime taxable gifts and estate exceeds the exemption, the excess is taxed at up to 40%. The current elevated exemption is scheduled to sunset at the end of 2025 without Congressional action — potentially reverting to ~$7M.
Do I pay gift tax or does the recipient?
The donor (giver) is responsible for any gift tax owed, not the recipient. Gifts are generally not income to the recipient for federal income tax purposes. However, if a gift generates income (stock that pays dividends), the recipient is taxed on that income.
Are there unlimited gift exclusions for education or medical expenses?
Yes — payments made directly to an educational institution for tuition, or directly to a medical provider for care, are completely excluded from gift tax with no dollar limit. These must be paid directly to the institution, not reimbursed to the recipient.