Gift and estate tax exemptions have been changed for 2025, and Maggi Tax has the updates you need to make financial decisions with confidence! Find out what’s new for the upcoming year before scheduling a consultation with our dedicated team of experienced financial advisors.
Your Gift Tax Overview:
If you ever plan on gifting money to a loved one, you should know how to do so in a way that minimizes the amount you are taxed. The best way to do this is by staying within your gift exemption limit to avoid tax fees or penalties.
When it comes to monetary gifts, you have an annual limit and a lifetime limit. Staying under your annual limit each year will help keep you from using your lifetime limit and avoid paying taxes. These limits have increased for 2025.
What to Expect For Gift Tax In 2025
The gift tax exclusion that is determined by the IRS is subject to change each year. Those who had gifted money to family members in 2024 had to stay within $18k per recipient to avoid tax penalties, but that limit will be increasing to $19k per recipient for 2025. Those who are married can combine their limits for a total of $38k per recipient.
For lifetime gift and estate limits, there will be a $380k increase from $13.61 million in 2024 to $13.99 million in 2025. If you have already maxed out your lifetime limit by 2025, you can use the difference to give more money without incurring tax. Like with the annual limit, married couples can combine their lifetime gift limit to take advantage of the $760k total increase.
Gifting Spouse to Spouse
Married couples may also send monetary gifts to each other without incurring tax by staying under their limit. For example, an American citizen can send up to $190k to their non-citizen spouse in 2025 without paying penalties.
Learn more financial planning tips for newlyweds!
Penalties For Exceeding the New Gift Tax Limit
Should you go over your annual gift limit, any excess amount will use your lifetime gift limit. In 2025, this means that if you gift a recipient more than $19k, whatever is left over will be counted towards your $13.99 million lifetime limit. Any instance is to be reported to the IRS by April 15th of the following year that the gift was given.
Future Possible Updates to Expect
Depending on how things play out, there’s a chance that the gift and estate limit will revert back to how it was in 2018 by the year 2026. This means that the new limit for 2025 will be practically cut in half by the following year and so you should plan accordingly. This information is based on current speculation and is subject to change. Keep up to date with Maggi Tax for all of the latest news and updates!
Need Help Understanding Gift Taxes? Schedule a Consultation With Maggi Tax!
Rules and regulations surrounding taxes are always changing, and it can be hard to keep up with them all. If you plan on making any substantial monetary gifts anytime soon, schedule a consultation with Maggi Tax to make sure you’re going about it the best way possible. We’ll help you plan out your finances in a way that results in fewer taxes and penalties. Call (727) 799-1701 today!
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