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What Is the IRS Gift Limit for Spouses and Minors for 2024?



What Is the IRS Gift Limit for Spouses and Minors for 2024?

What Is the IRS Gift Limit for Spouses and Minors for 2024? In contemporary times, the exchange of gifts among friends, family, and relatives is a common practice. However, it’s essential to be aware that the United States imposes taxes on such gifts.

This tax obligation falls on either the donor or the receiver, depending on the nature of the gifted item. This article delves into the IRS Gift Limit, the amount of tax involved, and more.

IRS Gift Limit 2024

As per regulations set by the US federal government, citizens must file tax returns when exchanging substantial gifts. Typically, the donor is responsible for paying the tax, although in certain situations, the tax burden may shift to the receiver. The IRS Gift Limit signifies that gifts valued below a specific threshold do not require reporting to authorities.

In 2024, the IRS Gift Limit has been exceeded by $1000, totaling $18,000. This means that a US citizen can present and transfer property to the recipient’s name without incurring any tax liability if the gift’s cost is below this limit.

If the gift surpasses this limit, the giver must file a tax return, and the excess amount will be added to the lifetime gift tax limit. In 2023, this limit stood at $12.92 million.

IRS Gift Limit for Spouses and Minors

The limit for spouses and minors varies depending on the type of gift. According to the Internal Revenue Service, for married couples, the limit is $36,000. This amount allows couples to gift property to each other without being subject to gift tax.

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Couples can collectively gift this specified amount to their spouse within the current year. For example, if a couple has two children, each child can receive a gift of the mentioned amount from the couple. The IRS Gift Limit for both minors and spouses aligns with the earlier mentioned limit.

If the spouse does not hold US citizenship, the gift will not fall under this limit, and tax will be obligatory on transferring ownership of an asset to the non-citizen spouse.

IRS Tax Rates 2024

When the total value of gifts exceeds the lifetime limit, taxpayers are responsible for paying taxes based on the following table:

Amount Taxable Tax Rate
Less than $10000 18%
Between $10001 and $20000 20%
Between $20001 and $40000 22%
Between $40001 and $60000 24%
Between $60001 and $80000 26%
Between $80001 and $100000 28%
Between $100001 and $150000 30%
Between $150001 and $250000 32%
Between $250001 and $500000 34%
Between $500001 and $750000 37%
Between $750001 and $1000000 39%
More than $1000000 40%

IRS Tax-Free Rates 2024

The rates presented in the table above are for 2023. The official rates for 2024 are yet to be released. Additionally, some gifts are exempt from federal taxes, including those worth less than the annual permitted IRS Gift Limit, gifts to political organizations, gifts to US citizen spouses, and direct payments for medical incidentals and education fees. Adhering to these rules not only prevents fines but may also qualify citizens for Federal Tax relief, enhancing their overall quality of life.

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IRS Gift Limit for 2024 is crucial for navigating gift taxation. Adhering to these guidelines ensures compliance with tax regulations and may lead to potential Federal Tax relief, safeguarding financial well-being and fostering a more secure future.

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