A common question on taxes is about gifting. A gift of money or property is not deductible on your tax return nor does the recipient report the gift as income. For 2018, the annual gift exclusion was $15,000 and is the same for 2019. A gift over this amount simply uses a piece of your lifetime exemption. A gift consisting of a direct payment to providers for medical and education expenses does not count toward the annual gift tax exclusion limit. However, with a doubling of the estate tax exemption to $11,200,000 per person, the annual exclusion amount now has little meaning to most people.
As always, consult with your tax professional at Ketel Thorstenson about these or other tax matters because each situation is different. Don’t navigate the difficult and ever changing tax codes and legislation on your own. Ketel Thorstenson CPAs and tax professionals receive advanced training and continuing education all year long to keep our service on the forefront of the tax industry. Call us today for guidance on tax planning, tax return preparation, and/or Tax Reform (the Tax Cuts and Jobs Act) affects or questions.