Parents and grandparents often dole out “gifts” to the children to help with various and sundry expenses. But when is a cash gift taxable to the recipient? Gifts up to $14,000 from an individual (or $24,000 from a legally married couple) aren’t taxable, according to the IRS, but you may have to pay taxes on anything that exceeds that amount. Here are more considerations to bear in mind regarding non-taxable cash gifts:
- Gifts made to a legally married spouse are never taxable.
- Tuition or medical expenses paid directly to a medical or educational institution on someone else’s behalf are not taxable.
- Gifts made to a political organization for its use are not taxable.
- Gifts made to charities are not taxable.
Also note that you may not be able to deduct the amount you gift from your income tax, with the exception of qualified charitable contributions.
IRS.gov. April 1, 2015. “Seven Tips to Help You Determine if Your Gift is Taxable.” http://www.irs.gov/uac/Seven-Tips-to-Help-You-Determine-if-Your-Gift-is-Taxable. Accessed April 1, 2015.