Gift Tax Calculator: Calculate Your Gift Tax Liability with Ease
The Gift Tax Calculator helps you estimate the amount of gift tax you may owe based on the total value of gifts given, applicable annual exclusions, and the gift tax rate.
This tool considers the number of recipients, annual and lifetime exemptions, and the tax rate to calculate the taxable gift amount, total gift tax owed, and remaining lifetime exemption.
Use this calculator to plan your gifts efficiently and avoid unexpected tax liabilities.
Plain Text Formulas:
Taxable Gift Amount Calculation: Taxable Gift Amount = Gift Amount - (Annual Gift Exclusion Amount × Number of Recipients)
Total Gift Tax Owed Calculation: Total Gift Tax Owed = (Taxable Gift Amount - Lifetime Gift Exemption Amount) × Gift Tax Rate Note: If the Taxable Gift Amount is less than the Lifetime Gift Exemption Amount, the Total Gift Tax Owed is $0.
Remaining Lifetime Exemption Calculation: Remaining Lifetime Exemption = Lifetime Gift Exemption Amount - Taxable Gift Amount
Step-by-Step Guide with Real-Life Example:
Scenario: Imagine you want to gift $100,000 to two recipients in 2024. The annual exclusion amount is $17,000 per recipient, and the lifetime exemption amount is $12.92 million. Let's assume the gift tax rate applicable after using up the lifetime exemption is 40%.
Step 1: Calculate the Taxable Gift Amount
Input the values:
Gift Amount = $100,000
Annual Gift Exclusion Amount = $17,000
Number of Recipients = 2
Apply the formula: Taxable Gift Amount = 100,000 - (17,000 × 2) Taxable Gift Amount = 100,000 - 34,000 Taxable Gift Amount = 66,000
Taxable Gift Amount = $66,000
Step 2: Calculate the Total Gift Tax Owed
Determine if the taxable gift amount exceeds the lifetime exemption:
Lifetime Gift Exemption Amount = $12.92 million
Taxable Gift Amount = $66,000
Since $66,000 is less than the $12.92 million lifetime exemption, no gift tax is owed.
Total Gift Tax Owed = $0
Step 3: Calculate the Remaining Lifetime Exemption
Apply the formula: Remaining Lifetime Exemption = 12,920,000 - 66,000 Remaining Lifetime Exemption = 12,854,000
Remaining Lifetime Exemption = $12,854,000
Facts About Gift Tax:
Annual Gift Exclusion:
In 2024, you can gift up to $17,000 per recipient without incurring any gift tax.
Lifetime Gift Exemption:
The lifetime exemption allows you to give away a total of $12.92 million over your lifetime without facing a gift tax.
Gift Splitting:
Married couples can combine their annual exclusions, allowing them to gift up to $34,000 per recipient annually without incurring gift tax.
Tax Rate:
The gift tax rate can be as high as 40%, depending on the total value of taxable gifts.
No Gift Tax Between Spouses:
Gifts between U.S. citizen spouses are generally exempt from gift tax.
FAQ Section:
What is a gift tax?
A gift tax is a federal tax imposed on the transfer of money or property to another person without receiving something of equal or greater value in return.
How much can I gift without paying taxes in 2024?
In 2024, you can gift up to $17,000 per recipient without incurring any gift tax.
What happens if I exceed the annual gift exclusion?
If you exceed the annual gift exclusion, the excess amount will count against your lifetime gift exemption of $12.92 million.
Are gifts to charity subject to gift tax?
No, gifts to qualifying charities are generally exempt from gift tax.
Is the gift tax rate the same for everyone?
No, the gift tax rate varies based on the total amount of taxable gifts and the applicable tax brackets. It can go up to 40%.