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In 2024, the annual gift tax exclusion is $18,000 per recipient. You can give up to $18,000 to each person without paying gift tax. The exclusion for 2023 is $17,000. The IRS announced these increases on November 9, 2023.
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The gift and estate tax exemption will be $13,610,000 per individual in 2024, up from $12,920,000 in 2023. Married couples can transfer up to $27,220,000. If total lifetime gifts exceed this, gift and estate taxes may apply.
- Using this exclusion and the lifetime exemption, married couples have several options to gift assets tax-free. One is making gifts over multiple years up to the annual exclusion amount. Another is gifting above the annual exclusion and using the increased lifetime exemption. Seeking professional tax advice can help manage substantial gifting while complying with regulations.
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For 2024 estates, the exemption is $13,610,000 – an increase of $690,000 from 2023. For married couples, the exemption doubles to $27,220,000. If estate value is below the exclusion amount, no federal estate tax applies for heirs. However, any excess value may incur taxes.
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The continued rise in exemptions provides more lifetime gift options. Individuals can fully utilize the annual gift tax exclusion. Individuals projected above the estate tax exemption should consider lifetime gifts before 2025 when exemptions may decrease.