What Is the Gift Tax and When Do You Need to File?

Gift Tax Explained

Annual Exclusion

You can give up to $19,000 per person per year (2025) without any gift tax consequences.

• Gifts to a spouse who is a U.S. citizen are unlimited
• Direct payments for tuition or medical bills (paid to the institution) don't count toward the limit

Taxable Gifts

Gifts exceeding the annual exclusion reduce your lifetime exemption ($13,990,000 in 2025). You only actually pay gift tax once you've used up your lifetime exemption.

Form 709: Gift Tax Return

Filing is required when:

• You give more than $19,000 to any one person in a year
• You give a gift of a future interest (e.g., certain trust gifts)
• You split gifts with your spouse

Gift Splitting

Married couples can combine their exclusions to give $38,000 per recipient per year by electing gift splitting on Form 709.

Common Misconceptions

• The recipient does NOT pay taxes on gifts received
• Most people never pay actual gift tax due to the large lifetime exemption
• Forgiven loans can be considered gifts

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Made large gifts this year? Let our team determine if you need to file Form 709.