Under the existing Federal annual gift tax exclusion, an individual is permitted to gift as much as $15,000 to as many individuals as he or she wishes in 2020 without any gift tax consequences. Further, because this exclusion is available for an individual’s use each tax year (subject to any changes in the amount of the exclusion), an individual can make a gift on or before December 31st and another gift on January 1st without incurring any gift tax because each gift was made in a separate tax year. Additionally, a husband and wife are each entitled to utilize the annual gift tax exclusion, doubling the amount that a couple can give to an individual in a given tax year. Accordingly, the annual gift tax exclusion can be used as part of an overall wealth transfer strategy ultimately reducing estate taxes at the time of your death.
The attorneys in our Estates and Tax Practice Group regularly assist individuals in addressing these and other important estate planning issues. If you are interested in learning more about annual gifting strategies and/or other estate planning techniques, please contact Catherine Mihalick of our Estates and Tax Practice Group (email@example.com). We are here to help!