Gift Tax Limit Explained: How Much You Can Give Without Paying Taxes
Written by
Angela Mae Watson
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Melanie Grafil, M.A., CHFC™
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Thinking about giving money or assets to family or friends? The IRS has strict gift tax limits that affect how much you can give without triggering taxes. This guide breaks down the annual and lifetime gift tax limits, how gift splitting works and when you need to file Form 709.
This guide breaks down the 2025 gift tax limits, explains when Form 709 is required and shares smart ways to stay within the limits without triggering penalties.
What Is the Gift Tax?
The gift tax is a federal tax applied when someone gives money or assets to someone without receiving something of equal value in return.
Most gifts don’t trigger an actual tax bill, but depending on the size and timing, they may require reporting.
What Qualifies as a Gift?
| Considered a Gift | Excluded from Gift Tax Rules |
|---|---|
| Cash or checks | Tuition payments made directly to a school |
| Stocks or real estate | Medical expenses paid directly to a healthcare provider |
| Paying someone else’s bills (unless paid directly to provider) | Gifts to a spouse who is a U.S. citizen |
| Interest-free or below-market loans | Paying someone else’s bills — unless paid directly to the provider |
What Is the Gift Tax Limit?
There are two types of IRS gift limits: the annual exclusion and the lifetime exemption. These limits are adjusted annually for inflation.
| Tax Year | Annual Limit (Per Recipient) | Married Couple (Split Gift) | Lifetime Exemption |
|---|---|---|---|
| 2023 | $17,000 | $34,000 | $12.92 million |
| 2024 | $18,000 | $36,000 | $13.61 million |
| 2025 | $19,000 | $38,000 | $13.99 million |
| 2026 | $19,000 | $38,000 | $15 million |
Annual Gift Tax Exclusion
The annual gift tax exclusion is the amount you can give each year. You can give up to the annual limit to each recipient without filing a gift tax form. That means in 2025 and 2026, you could give $19,000 to as many people as you’d like — all tax-free.
Gift Splitting for Married Couples
Married couples can combine their exclusions and give up to $38,000 per recipient without triggering reporting requirements, as long as they both agree to the split and file jointly.
Lifetime Gift Tax Exemption
The lifetime gift tax exemption is sometimes confused with the annual exclusion. The lifetime gift tax exemption is the total amount that you are allowed to give over your entire lifetime without being taxed.
Anything that you give that exceeds your annual limit will count toward your lifetime gift tax exemption. However, you likely won’t owe taxes unless your total lifetime gifts exceed the exemption. For 2025, that threshold is $13.99 million.
How Does the Gift Tax Work?
When You Must File IRS Form 709
You need to file Form 709 if:
- You give more than the annual exclusion to one person in a calendar year
- You and your spouse split a gift (even if under the combined limit)
You must file Form 709 even if you don’t owe taxes on the gift. For example, if you’re still within your lifetime gift tax exemption, you must still file the form so the IRS can track all of your gifting during your lifetime.
Important To Know
Filing Form 709 doesn’t mean you owe taxes — it just tracks your use of the lifetime exemption.
Gift Tax Rates and How They’re Calculated
If you exceed the lifetime exemption, the tax rate on the excess amount ranges from 18% to 40% depending on how much over the limit you are.
Gift Tax Examples
Giving to Multiple Recipients
You can gift $19,000 to each child, grandchild or friend. If you give $19,000 to five people, you’ve gifted $95,000 — all within the limit.
Married Couples Gifting Jointly
A couple could give $38,000 to each of their three children in 2025 without hitting the lifetime cap or needing to pay tax — a total of $114,000.
Exceeding the Annual Limit
Say you gave $25,000 to your niece in 2025. IRS gift tax rules allow $19,000 under the annual exclusion and require you to file Form 709 and report the excess $6,000. That $6,000 gets subtracted from your lifetime gift exemption.
Who Pays the Gift Tax?
Donor vs. Recipient Rules
The giver, not the recipient, is responsible for any gift taxes owed. However, recipients should be aware of reporting if the gift involves income-producing assets, like stocks or real estate.
How To Report Gifts Over the Limit
Steps To Complete Form 709
- Download IRS Form 709 from IRS.gov
- Fill out donor info, gift details and any gift-splitting election
- Submit it with your tax return by April 15 of the following year
No tax is due unless your total lifetime gifts have exceeded the federal exemption.
IRS Filing Deadline
Form 709 is due on April 15 following the year in which you made your gift. If you made your gift in 2025, you must submit Form 709 to the IRS by April 15, 2026.
How To Avoid Paying Gift Tax
Use Annual Limits Strategically
To avoid paying gift tax, spread your gifts across multiple years or across multiple recipients. Keeping these gifts under the annual gift tax limit can help you avoid paying tax.
Pay for Education or Medical Costs
When gifting money to help cover education or medical costs, pay tuition or medical bills directly to the providers, not the individual.
Use Your Lifetime Exemption Wisely
Leverage your lifetime exemption to avoid or minimize paying gift tax. Maximize your annual limits first; any giving in excess of those limits will go toward your lifetime gift exemption.
Final Take: Plan Smart, Avoid Surprises
Understanding the gift tax limit helps you stay generous without triggering tax headaches. Most people never pay gift tax thanks to the high exemptions, but knowing the rules ensures you report gifts correctly and avoid unnecessary trouble with the IRS.
If you’re considering large gifts or estate transfers, it may be worth speaking with a financial advisor or estate attorney. Planning ahead can help you make the most of your giving — and your tax breaks.
FAQ About Gift Tax Limits
Here are the answers to some of the most frequently asked questions about gift tax limits and rules:- What is the gift tax limit for 2025?
- $19,000 per recipient in 2025.
- Do I have to pay tax if I give someone more than the annual limit?
- No, not immediately. But you must file Form 709 and reduce your lifetime exemption by the excess.
- Who files Form 709 -- the giver or receiver?
- The giver is responsible for filing.
- Does gift tax apply to tuition or medical payments?
- No, as long as you pay the provider directly -- not the person receiving the care or education.
- How can married couples give more without paying gift tax?
- They can split gifts up to $38,000 per recipient annually if they file jointly and submit Form 709.
Rudri Bhatt Patel contributed to the reporting for this article.
Information is accurate as of Feb. 4, 2026.
Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.
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