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Gift Tax Calculator
You can use this gift tax calculator to determine the amount of tax you owe over a given taxation period.
How to use the gift tax calculator:
- Select your tax year.
- Choose your filing status from the drop-down list.
- Enter the value of the gifts you have given during the selected tax year.
- Enter the value of the gifts you have given before the selected tax year.
- Click on the "Calculate" button to compute the gift tax.
Results
Understanding Gift Tax
Per the definition set out by the IRS, a gift is a sum of money or a property that you gift to another individual without any expectation of receiving something in return. The person who gives the gift is required to pay tax on the value of this gift.
Taxpayers benefit from exemptions from gift tax. The IRS grants American citizens both a lifetime and an annual exclusion. The level of this exclusion entails that you will need to give away a significant amount of assets before it comes into use.
Gifts are only subjected to tax at the point at which they exceed the lifetime exemption; that is, the value of gifts you're permitted to give away during your lifetime. As of 2024, the lifetime exclusion level is $13.61 million.
Lifetime Gift Tax Exemption
The lifetime exemption is the value of gifts you can give to others during your lifetime before you are subjected to gift taxation. The exemption figure covers both the lifetime gift tax exemption and the estate tax exclusion. In 2024, the exemption sits at $13.61 million dollars. However, it is important to bear in mind that any element of the exemption that you use to avoid paying tax on gifts will decrease the exemption you have available for estate tax. For instance, if you use $1 million of the exemption on taxable gifts during the course of your lifetime, you will only have $12.61 million of the exemption remaining for estate tax. Once the lifetime limit has been surpassed, you or your heirs will be required to pay from 18 to 40 percent of the amount.
Annual Gift Tax Exclusion
You can use the gift tax exclusion to give away a set amount every year, $18,000 in 2024 ($17,000 in 2023; double if married), to as many people as you wish without being required to pay a gift tax. However, if you gift an amount of money or assets that exceed this threshold, you will be required to pay tax. Gifts can take multiple forms, including investments, real estate, cash, or jewelry. Every now and again, the gift tax exclusion is altered according to inflation.
Some things are not treated as gifts by the IRS. As such, you can make unlimited gifts in these areas without needing to pay gift tax or file the associated paperwork.
- Gifts to charities that have been approved by the IRS.
- Gifts to your husband or wife, providing he or she is a US citizen.
- Gifts to political organizations.
- Gifts that are made to cover someone else's medical expenses provided that the payment is made directly to the provider.
- Gifts that are made to cover someone else's educational fees provided that the payment is made directly to the provider.
| Gift Tax Exemptions and Exclusions | ||
|---|---|---|
| Year | Lifetime Exemption | Annual Exclusion |
| 2024 | $13.61 million | $18,000 |
| 2023 | $12.92 million | $17,000 |
| 2022 | $12.06 million | $16,000 |
| 2021 | $11.7 million | $15,000 |
| 2020 | $11.58 million | $15,000 |
| 2019 | $11.4 million | $15,000 |
| 2018 | $11.18 million | $15,000 |
| 2017 | $5.49 million | $14,000 |
| 2016 | $5.45 million | $14,000 |
| 2015 | $5.43 million | $14,000 |
| Table for Computing Gift Tax | |||
|---|---|---|---|
| Taxable Amount Over | Taxable Amount Not Over | Tax on Amount in First Column | Rate of Tax on Excess Over Amount in First Column |
| $0 | $10,000 | $0 | 18% |
| $10,000 | $20,000 | $1,800 | 20% |
| $20,000 | $40,000 | $3,800 | 22% |
| $40,000 | $60,000 | $8,200 | 24% |
| $60,000 | $80,000 | $13,000 | 26% |
| $80,000 | $100,000 | $18,200 | 28% |
| $100,000 | $150,000 | $23,800 | 30% |
| $150,000 | $250,000 | $38,800 | 32% |
| $250,000 | $500,000 | $70,800 | 34% |
| $500,000 | $750,000 | $155,800 | 37% |
| $750,000 | $1,000,000 | $248,300 | 39% |
| $1,000,000 | --- | $345,800 | 40% |
References
IRS: Frequently Asked Questions on Gift Taxes
IRS: Instructions for Form 709
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