CandleFocus Glossary Editor
Gift splitting offers married couples the opportunity to give more to friends and family as a couple than they would be able to do individually. With gift splitting, each spouse can make a gift of up to the annual exclusion amount set by the IRS, with the gifts being split between them. This is beneficial to married couples who wish to give more to designated recipients than they could do if giving as a single person. Gifts made as a couple can be made using either spouse’s income, as long as both spouses agree to the gifts.
For the year 2022, the annual exclusion amount for gifts made by married couples is $32,000 and for 2023, it is up to $34,000. This basically allows you to give a single person up to $16,000 or $17,000 in one year without having to pay taxes on it. Any amount over the annual exclusion requires that a gift tax return be filed with the IRS. Also, certain gifts like those made to charities, political organizations, or to pay tuition and medical expenses on behalf of someone else, are generally not taxable.
Gift splitting can be a useful tool for couples who want to give more to a person or to charity. It can also help reduce gift tax liabilities, as the couple is only taxed on the amount that exceeds the annual exclusion. However, it’s important to note that couples who do this must file joint tax returns.
Gift splitting is a great way for married couples to maximize their giving. Couples can give more than an individual could give and help reduce their tax liabilities. It’s important to remember to file gift tax returns when the amount given exceeds the annual exclusion and to always consult with a tax or financial professional for advice about the best giving strategies for their particular situation.
For the year 2022, the annual exclusion amount for gifts made by married couples is $32,000 and for 2023, it is up to $34,000. This basically allows you to give a single person up to $16,000 or $17,000 in one year without having to pay taxes on it. Any amount over the annual exclusion requires that a gift tax return be filed with the IRS. Also, certain gifts like those made to charities, political organizations, or to pay tuition and medical expenses on behalf of someone else, are generally not taxable.
Gift splitting can be a useful tool for couples who want to give more to a person or to charity. It can also help reduce gift tax liabilities, as the couple is only taxed on the amount that exceeds the annual exclusion. However, it’s important to note that couples who do this must file joint tax returns.
Gift splitting is a great way for married couples to maximize their giving. Couples can give more than an individual could give and help reduce their tax liabilities. It’s important to remember to file gift tax returns when the amount given exceeds the annual exclusion and to always consult with a tax or financial professional for advice about the best giving strategies for their particular situation.