What Is The Gift Tax and How Much Can You Gift Tax-Free

Gifting is a great thing for both the one doing the giving and for the receiver. But how much can you gift before the IRS comes calling? You might be surprised to know that for many people, they’ll never pay taxes on those gifts. It's all because of the generous gift tax exclusion included in the US tax law.

Due to the gift tax exclusion, you can literally shield hundreds of thousands or millions of dollars over your lifetime from income tax. And your recipients will generally never have to pay taxes on your gifts, even if you do exceed the annual or lifetime gift tax exclusion limits.

If you gave away a lot of money this year, make sure that you use a capable tax software that understands the gift tax limits and can get you the deductions you deserve. These are our favorite tax software companies. Let’s see how the gift tax works.