What is the Gift tax annual exclusion?
The gift tax annual exclusion is the maximum amount an individual can give to another person each year without incurring gift tax liability or requiring the filing of a gift tax return. For 2024, this amount is $18,000 per recipient, allowing married couples to give up to $36,000 per recipient annually jointly. This exclusion applies separately to each recipient, enabling parents to give substantial amounts to multiple children without tax consequences. The annual exclusion is particularly valuable for families implementing kiddie tax planning strategies, as it allows income-generating assets to be transferred to children while staying within tax-free limits. Strategic gifting combined with Child traditional IRA contributions can help families build wealth for future generations while minimizing current tax obligations.
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