Gift Tax Calculator (U.S. 2024–2025)
Estimate whether a gift is taxable, how much of your lifetime exemption it uses, and if you may need to file IRS Form 709.
Gift Tax Calculator
Include all gifts to this person in the calendar year, including cash, checks, and property at fair market value.
Gift-splitting lets married couples effectively double the annual exclusion for a recipient, but usually requires Form 709 for both spouses.
Approximate total of prior taxable gifts (after annual exclusions) plus any amounts already applied to your lifetime exemption.
Examples: direct payments of tuition to a school, or medical expenses paid directly to a provider for someone else. These are generally not taxable gifts.
Results summary
Likely no Form 709 required for this gift (based on inputs).
This is a simplified estimate for educational purposes only. Always confirm filing requirements and tax owed with the official IRS instructions or a qualified tax professional.
How this gift tax calculator works
U.S. federal gift tax rules are often misunderstood. Most people never pay gift tax, even when they give more than the annual exclusion, because of the large lifetime exemption. This calculator helps you:
- Check whether a gift exceeds the annual exclusion per recipient.
- Estimate the portion that becomes a taxable gift.
- Track how much of your lifetime gift & estate tax exemption you may use.
- See if you’re likely to owe gift tax now or just need to file Form 709.
Key assumptions (2024–2025)
- Annual exclusion: $18,000 per recipient per year (2024 and projected 2025).
- Lifetime exemption: $13.61 million per person for 2024 (we assume the same for 2025 for illustration).
- Gift-splitting: If you and your spouse split gifts, the annual exclusion is effectively doubled for that recipient.
- Tax rate: We assume no current gift tax due unless your cumulative taxable gifts exceed the lifetime exemption.
Core calculation steps
-
Determine annual exclusion:
Annual exclusion per recipient × number of donors (1 or 2 for gift-splitting). -
Taxable gift for this recipient:
Taxable gift = max(0, total gifts to this recipient − effective annual exclusion). -
Lifetime exemption used by this gift:
Equals the taxable gift amount (assuming you haven’t exceeded the lifetime exemption yet). -
Remaining lifetime exemption:
Remaining = lifetime exemption − prior lifetime used − taxable gift from this calculator.
What is gift tax?
The federal gift tax is a tax on the transfer of property from one person to another when you receive nothing (or less than full value) in return. It applies to cash, checks, property, forgiving a debt, and some below-market loans.
Importantly, the tax is imposed on the donor (the giver), not the recipient. The recipient generally does not report the gift as income.
Annual exclusion vs. lifetime exemption
- Annual exclusion: You can give up to $18,000 per recipient per year (2024) without using any of your lifetime exemption. Married couples can effectively give $36,000 per recipient with gift-splitting.
- Lifetime exemption: On top of the annual exclusion, you have a combined gift and estate tax exemption (about $13.61 million per person in 2024). Taxable gifts above the annual exclusion reduce this exemption.
When do you actually pay gift tax?
You only pay federal gift tax when your cumulative taxable gifts plus taxable estate exceed your lifetime exemption. For most people, that never happens. However, you may still need to file Form 709 to report gifts that exceed the annual exclusion, even when no tax is due.
Common gift tax exclusions and exceptions
- Annual exclusion gifts (up to $18,000 per recipient per year).
- Unlimited gifts to a U.S. citizen spouse (special rules apply for non‑citizen spouses).
- Direct payments of tuition to an educational institution (not to the student).
- Direct payments of medical expenses to a provider or insurer.
- Charitable contributions to qualifying organizations.
The checkbox in the calculator (“Gift qualifies for a special unlimited exclusion”) is a shortcut for these direct tuition/medical payments and similar fully excluded transfers. When checked, the calculator treats the gift as non‑taxable for federal gift tax purposes.
When is IRS Form 709 required?
You generally must file Form 709 if any of the following apply:
- You give more than the annual exclusion to any one person in a year.
- You and your spouse elect to split gifts.
- You make gifts of future interests (e.g., certain trust gifts).
- You make certain generation‑skipping transfers (subject to GST tax rules).
Filing Form 709 does not automatically mean you owe tax. In many cases, it simply tracks how much of your lifetime exemption you’ve used.
Example scenarios
Example 1 – $30,000 gift to a child (single donor)
- Total gifts to child in 2024: $30,000
- Annual exclusion: $18,000
- Taxable gift: $30,000 − $18,000 = $12,000
- Form 709 required: Yes (gift exceeds annual exclusion).
- Gift tax due now: Likely $0 if you have lifetime exemption remaining.
Example 2 – Married couple gives $60,000 to one child (gift-splitting)
- Total gifts to child: $60,000
- Donors: 2 (spouses elect gift-splitting)
- Effective annual exclusion: 2 × $18,000 = $36,000
- Taxable gift: $60,000 − $36,000 = $24,000 (split between spouses).
- Form 709 required: Yes for each spouse to elect gift-splitting.
Limitations and important notes
- This tool focuses on U.S. federal gift tax, not state gift or inheritance taxes.
- It assumes current law and simplified brackets; Congress can change limits and rates.
- It does not handle complex trusts, GRATs, CLTs, or detailed GST tax calculations.
- Always consult the latest IRS instructions and a qualified tax professional for your specific situation.
Gift tax FAQ
Who actually pays U.S. gift tax?
The donor (the person giving the gift) is responsible for any federal gift tax, not the recipient. In practice, most donors never pay gift tax because of the annual exclusion and the large lifetime exemption. However, you may still need to file Form 709 to report gifts that exceed the annual exclusion.
What is the annual gift tax exclusion for 2024 and 2025?
For 2024, the annual exclusion is $18,000 per recipient. For 2025, it is currently expected to remain $18,000 unless Congress changes the law. You can give up to this amount to as many different people as you like each year without using any of your lifetime exemption.
Do I owe tax if I give more than the annual exclusion?
Not necessarily. Amounts above the annual exclusion become taxable gifts, but they first reduce your lifetime gift and estate tax exemption. You only pay gift tax when your cumulative taxable gifts plus taxable estate exceed that lifetime limit. You may still need to file Form 709 even when no tax is due.
Are 529 plan contributions subject to gift tax?
Yes. Contributions to a 529 college savings plan are treated as gifts to the beneficiary. However, you can elect to spread a large contribution over five years for gift tax purposes (“5‑year averaging”), using five years of annual exclusions at once. This requires filing Form 709 to make the election, but often no tax is due if you have sufficient lifetime exemption.
How would the IRS know about my gifts?
The system relies heavily on self‑reporting via Form 709 and estate tax returns. Large transfers can also be visible through bank records, audits, or during estate administration. Failing to file required gift tax returns can create problems later for your estate or beneficiaries, even if no tax would have been due at the time of the gift.