Most people like to share their money with their family members or with friends as a gift, not only for the close surroundings also for charitable organizations.
There are a lot of rules and regulations that you should aware of before or gifting some amount to your friends or family. You can get the financial advisers’ opinion if you need to escape from the taxes and they will help you in giving the tips on how could you possibly prevent the taxes. Usually, the money gift of family not taxed but it is better to ask an expert before gifting.
Annual limits
Everyone knows that there will be an annual limit for transferring money from one account to another but there is also a limit for annual gift money. The limitation will get altered each year so it’s important to grasp and knowledge on it before gifting the money or else you have to pay extra taxes to the government.
But the gift between husband and wife are exempt you can gift them as much you can, it is free of financial taxes. That if you gift money to a relatives it tax is not deductible, yes you can get a deduction in some instances but not all the time.
Suppose if you pay gift beyond your annual limit then you have to file it under some section and the reason for filing is to skip the gift and generation transfer tax return. It doesn’t mean that you are holding the taxes probably you won’t. So it is better to know how much money can be legally given to a family member as a gift.
Ways to gift the money
There is more than one way to gift the money for your loved ones, they are as follows;
Directly pay medical bills or tuition charges
When it seems to beyond your limitation you can directly do that job, this will help you to rescue from the taxes. If you want to pay the tuition charges you can pay it directly.
Spread the gift
If you are tempted to provide the gift that worth more than your annual limitation spread, it between the years that is split it into two halves instead of a single payment. It is one of the best options you can make use of it.
Final words
When you have an idea about the gift payment taxes you can act wisely based upon that. Try to not exceed beyond the annual limitations.
