In 2024, you could gift up to $18,000 per person without filing a Form 709, thanks to the annual gift tax exclusion under IRC §2503(b). In 2025, that number bumps up to $19,000, or $38,000 if you’re married and splitting the generosity. You can gift to as many people as you want—friends, family, your dog walker—but if you go over that amount for any one person, congrats: you’ve triggered tax filing (hello, Form 709).
But don’t panic—no gift tax is actually due unless you’ve blown through your lifetime gift and estate tax exemption, which is a breezy $13.61 million in 2024 and $13.99 million in 2025 (IRC §2010(c)). So unless you’re on your third vacation home and calling your CPA from a yacht, you’re probably in the clear.
Recipients pay no tax (IRC §102), and gifts don’t count as income—so Junior doesn’t have to claim that used Corolla you gave him as taxable wages. Just make sure it’s a gift of present interest, meaning they can actually use it now, not someday after you’ve laminated your will. One curveball: if your spouse isn’t a U.S. citizen, the annual exclusion is capped at $185,000 in 2024. The IRS is romantic, but only to a point.
Bottom line: the annual gift exclusion is one of the easiest ways to transfer wealth without raising red flags—or writing checks to Uncle Sam.
Key Points on the Annual Gift Tax Exclusion
- The annual gift exclusion is $19,000 per recipient in 2025, or $38,000 per couple when gift-splitting (IRC §2503(b)).
- You can gift to an unlimited number of people, but if a gift to any one person exceeds the exclusion, Form 709 must be filed.
- Gift tax is not triggered unless lifetime gifts exceed the estate and gift tax exemption of $13.99 million (IRC §2010(c)).
- Gifts are not taxable income to recipients and do not need to be reported (IRC §102).
- To qualify, the gift must be of present interest—usable by the recipient right away.
- If the recipient spouse is not a U.S. citizen, the annual exclusion for gifts is capped at $185,000.
- The annual exclusion is a simple and effective way to transfer wealth without triggering IRS scrutiny.