Tis the season for giving, as the clock runs down on 2016. This is a good time to think about year-end gifting. I’m talking more than the usual presents under the tree.
Currently the individual 2016 and 2017 annual gift exclusion amount is $14,000 per any one individual. You can gift up to the exclusion to anyone (not just family members) and any number of people, without the need to report the gift or incur any gift tax. Married couples can gift twice as much ($28,000) using gift splitting (this requires them to file a gift tax return using IRS Form 709).
We all have a lifetime exclusion. This is the amount above the $14,000 annual limit that we may gift during our lifetime without incurring gift taxes. For 2016, that amount is $5,450,000, and in 2017 it increases to $5,490,000.
