What is the maximum amount of money you can give someone?

Gifting Limits in 2023 and 2024: A Simple Guide

Giving a gift is a thoughtful gesture, but it’s important to be aware of potential tax implications. Fortunately, the annual gift tax exclusion simplifies the process, allowing for generous giving without incurring significant tax burdens.

In 2023, individuals could gift up to $17,000 per recipient without triggering gift tax obligations. This generous limit means that you can make numerous small gifts throughout the year without worrying about tax ramifications. The exclusion is designed to encourage charitable giving and familial support.

For 2024, the annual gift tax exclusion has increased to $18,000. This increase reflects the ongoing adjustment for inflation and further facilitates the act of giving. It’s important to note that this limit applies per recipient each year. If you gift someone $17,000 in 2023 and then $18,000 in 2024, you haven’t exceeded the limit in either year, even if the total is above $35,000. The limit applies separately to each year.

These limits are crucial for individuals and families navigating gifting strategies without complex calculations. If a gift exceeds the annual exclusion, gift tax implications come into play, potentially requiring additional paperwork and a gift tax return to be filed. Seeking professional advice from a qualified tax advisor is highly recommended to ensure compliance and maximize gift-giving opportunities while staying within the established parameters.