** This article has been revised from its original version which was published on Abril 8, 2020.

Before giving a gift to someone, think about what your intention is for the gift because there may be a better way to ensure your intentions while minimizing or eliminating any federal gift tax implications.

Some transfers come with financial consequences. Others are not subject to federal gift tax and, therefore, can be made in any amount. So how will you know what you can give before owing any taxes? There are many things to consider, and a New York estate planning attorney can look at the big picture so you can make an informed decision.

Examples of Transfers (Gifts) Not Subject to Gift Tax

• Gifts between spouses (don’t hold back on birthdays and anniversaries!)
• Payments that qualify for the educational exclusion (e.g., payment of college tuition for a child or grandchild)
• The payment must be made directly to the qualifying educational organization – NOT to the child or grandchild for them to make the payment
• Payments that qualify for the medical exclusion (e.g., payment for surgery or medical insurance for a loved one)
• The payment must be made directly to the person or institution that provided the medical care for the individual (e.g., to the hospital or to the health insurance company)
• Donaciones a organizaciones políticas
• Donaciones a determinadas organizaciones exentas (por ejemplo, organizaciones benéficas 501(c)(3))

New York Estate Planning Attorneys Explain Tax Laws that Impact Your Estate

The rules for federal gift taxes, income taxes, and estate taxes are all very different, and many people get confused and make mistakes when giving gifts. Consult with a New York estate planning attorney to learn about tax planning in general. The laws are always changing. In 2023, the annual gift exclusion allows you to give $17,000 to as many people as you like, even a favorite charity, without any negative tax consequences. You may even benefit by reducing your income taxes. The estate tax exemption amount is $6,580,000, which only impacts those with significant estates. Our New York estate planning attorneys can help you understand tax laws and gift taxes so you can give gifts as intended.

Start Your Estate Planning Today

When creating an estate plan, our experienced New York estate planning attorneys discuss tax planning and how to minimize gift taxes, as well as income and estate taxes. We ensure you never pay unnecessary taxes, only what you owe. The knowledgeable and compassionate team at Russo Law Group, P.C., provides professional services and advice regarding estate planning goals and helps you determine which combination of legal documents is right for your situation. We can develop a custom strategy of timely asset transfers to help minimize your estate and taxes when it makes the most sense. Take advantage of our comprehensive website as well as our free seminars and webinars to learn more about how Russo Law Group, P.C. provides peace of mind. Please contact our law firm to speak with one of our experienced  estate planning and elder law attorneys today at 1 (800) 680-1717.