Did you know gifts can actually be taxed? Your grand gesture might be less grand afterwards. Talk with your lawyer in Tampa to learn more about the gift tax and how it could affect you. In the meantime, check out some tidbits of information we have on the gift tax and what you need to know. For example, the IRS defines a gift as “Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money’s worth) is not received in return.” That is straight from the government agency’s website. Did you contact your lawyer in Tampa yet? Have no fear we still have more information to give!
The person who gives you the gift is responsible for the gift tax. However, the caveat to that is if they don’t pay, you might get stuck with paying the tax instead of them. The whole reason there is a gift tax is to stop people from avoiding the estate tax. Most people won’t have to worry about the gift tax but it’s always a good idea to have your lawyer in Tampa check to make sure the proper paperwork is always filled out.
Family Members: The gift tax does apply to your own family. However, you can give gifts to your spouse and be exempt from the tax. This is because of marital deduction, which reduces or even removes the tax.
Annual Gift Tax Exclusion: The current 2017 annual exclusion limit is $14,000 per recipient. This means the first $14,000 you give is gift tax free. For example, you could give $14,000 each to your two children and not have to pay a gift tax since it’s for each recipient. If you need more information related with gift tax then you can visit here on Business Lawyer Tampa .
Educational and Medical Exclusions: Probably one of the most common uses of gifting is paying for someone’s tuition or medical expenses. These don’t actually count towards the annual limit for gift taxes. But, the payments must be paid directly to the educational or medical organization.
Gift Tax Return: If you receive more than the $14,000 exclusion limit, than you must file a gift tax return (IRS Form 709). You may even be required to for amounts less than that depending on the case. Again, there are also exceptions and rules to this. It’s best if you meet with your lawyer to ensure you are following the law.
Promo Gifts: We have all seen their faces light up when somebody wins a car on a TV game show. Or when an entire audience looks under their chairs and see keys to a brand new car. However, these are actually not considered gifts by the IRS. That means that the person who gave these out did it for self-promotion. They are getting something out of it. Therefore, the burden of paying the taxes falls on the recipients and they are excluded from benefiting from the annual gift tax exclusion.
Check out our blog for more tips and info. Contact Fresh Legal Perspective today by calling (813) 448-1042 and ask about meeting one of our lawyers!