What Is the Gift Tax Limit? Essential Filing Tips for 2024
Written by
Angela Mae
Edited by
Joe Evans
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Thinking about giving money or assets to loved ones? Whether it’s a generous graduation gift, help with a down payment or part of your estate planning strategy, understanding how the gift tax limit works is important. The IRS sets annual and lifetime gift limits to determine when you need to file a form — and when you might owe tax.
This guide breaks down the 2024 and 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 Counts 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.
Gift Tax Limits at a Glance
| 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 |
Annual Gift Tax Exclusion
You can give up to the annual limit to each recipient without filing a gift tax form. That means in 2025, 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
Even if you give more than the annual limit, 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)
Important: Filing Form 709 doesn’t mean you owe taxes — it just tracks your use of the lifetime exemption.
Gift Tax Rates
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.
Real-Life Gift Scenarios
Giving to Multiple People
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 Together
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.
What If You Exceed the Limit?
Let’s say you give $25,000 to your niece in 2025. You’d need to file Form 709 and report the excess $6,000. That $6,000 gets subtracted from your lifetime exemption.
Who Pays the Gift Tax?
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
Filing IRS Form 709: Step-by-Step
- 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.
Tips To Avoid Paying Gift Tax
- Use annual limits wisely — spread gifts across years or recipients
- Pay tuition or medical bills directly to providers (not the individual)
- Leverage your lifetime exemption — especially if you’re planning to give large amounts before estate tax changes in 2026
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 2024 and 2025?Â
- $18,000 per recipient in 2024. $19,000 per recipient in 2025.Â
- Do I have to pay tax if I give someone more than the annual limit?Â
- No, not immediately. But you must file Form 709 and reduce your lifetime exemption by the excess.Â
- Who files Form 709 -- the giver or receiver?Â
- The giver is responsible for filing.Â
- Does gift tax apply to tuition or medical payments?Â
- No, as long as you pay the provider directly -- not the person receiving the care or education.Â
- How can married couples give more without paying gift tax?Â
- They can split gifts up to $38,000 per recipient annually if they file jointly and submit Form 709.Â
Information is accurate as of June 5, 2025.
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