Gift tax returns are required when your gifts to family members, friends, and other non-qualified charities exceed your annual gift exclusion. The annual exclusion for both 2014 and 2015 is $14,000. There are a number of ways to give more by combining spousal gifts and making gifts within a family unit. Beginning with 2015, the tax on a gift tax is not triggered until your combined lifetime gifts exceed $5.43 million.
So why are people reticent to file the return? There are three primary reasons:
- Alerting the IRS to a gift
- A confusion about a penalty or tax if the annual exclusion is greater than the limit
- Filing another form.
Let’s consider each of these individually:
- Better to alert them now while you know exactly what and how much you gave than shift this to your heirs upon your death.
- There is no tax or penalty just because you gave more than $14,000 unless you hit the lifetime limit. We should all aspire to hit the lifetime limit!
- The form can be detailed, but is normally not complex to complete.
So, lets get these filed and make sure the IRS doesn’t make your heirs do so! Waiting until then could cause problems with your estate planning and cost lots of money.
If you have any questions or concerns regarding gift tax returns, please don’t hesitate to give us a call at 314-993-4285 or email us at email@example.com