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Gifting Without a Paper Trail
Manage episode 355977108 series 3437793
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Every year brings the opportunity to take advantage of the annual gift tax exemption to non-charities when filing taxes, but many don’t understand the gift tax limit or its benefits.
In this episode, Alex explains the annual gifting limit, how to increase your 2023 gifting limit from $17,000 to potentially $68,000, and why it’s important to plan your gifts.
In this episode, you’ll also hear:
- Defining what the IRS considers a gift
- Common misunderstandings about the annual gift tax exemption
- Suggestions for creating a gifting plan and what forms are required for gifts
Must-listen moments:
[00:02:08] The IRS considers a gift to be where there is an exchange of cash or property or something of value with someone else where you do not receive at least equal value back in return.
[00:02:41] In 2023, currently you can gift up to $17,000 per recipient per calendar year to another person as part of your annual exemption…there are several ways to go above this $17,000 limit where you don't have to report or tell the IRS.
[00:07:15] By doing some planning, you can spread out your gifts over a multi-year period and stay under the gifting limits, avoiding some unnecessary paperwork and complexity and annual tracking of reporting. Planning also helps you be clear about your expectations and intentions as part of the gift.
Visit www.freelancefinancefix.com for more money tips for freelancers.
Follow Alex at https://www.linkedin.com/in/alexmlynch/
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