How Much Can You Give Tax Free in 2017
When it comes to giving money or assets, it is important to understand the tax implications involved. In the United States, the Internal Revenue Service (IRS) sets limits on how much you can give tax-free each year. These limits are subject to change, so it is important to stay updated on the latest regulations. In 2017, the tax-free gift limit is $14,000 per person.
1. What is a tax-free gift?
A tax-free gift refers to the amount of money or assets you can give to someone without having to pay any gift tax.
2. Who can I give tax-free gifts to?
You can give tax-free gifts to anyone you choose, such as family members, friends, or even strangers. However, there are certain exceptions to this rule, such as political organizations or gifts to employees.
3. Is the $14,000 limit per person or per couple?
The $14,000 limit is per person, meaning that each individual can give up to $14,000 to another person without incurring any gift tax. If you are married, you and your spouse can each give $14,000, totaling $28,000 for the recipient.
4. Can I give more than $14,000 tax-free?
Yes, you can give more than $14,000 tax-free, but any amount exceeding this limit will be subject to gift tax. However, keep in mind that there is a lifetime gift tax exemption that allows you to give a certain amount over your lifetime without incurring any gift tax. In 2017, this exemption is set at $5.49 million.
5. Do I need to report tax-free gifts to the IRS?
Even though tax-free gifts do not require you to pay gift tax, you still need to report them to the IRS using Form 709. This form allows the IRS to keep track of your lifetime gift tax exemption.
6. Can I deduct tax-free gifts from my income tax?
No, you cannot deduct tax-free gifts from your income tax. Tax-free gifts are not considered as deductible expenses.
7. Can I give an unlimited amount to my spouse tax-free?
Yes, you can give an unlimited amount of money or assets to your spouse without incurring any gift tax. This is known as the unlimited marital deduction.
8. What happens if I exceed the annual gift tax exclusion?
If you exceed the annual gift tax exclusion, you will need to file a gift tax return and use a portion of your lifetime gift tax exemption. The excess amount will be subtracted from your lifetime exemption and may affect your estate tax exemption in the future.
In conclusion, the tax-free gift limit for 2017 is $14,000 per person. This means that you can give up to $14,000 to any individual without having to pay gift tax. However, it is important to keep in mind the lifetime gift tax exemption of $5.49 million and to report all tax-free gifts to the IRS using Form 709. Understanding the rules and limits surrounding tax-free gifting can help you make informed decisions when it comes to giving money or assets to others.