The holiday season is a time of giving, but as you celebrate this time with your family and friends, you may need to be aware of a certain omnipresent aspect of American life: taxes. While it will likely only apply to people who earn a high income or have large financial assets, it is still a good idea to understand the Federal gift tax and the impact it may have on the gifts you give and your estate.What Is the Gift Tax?
When a person transfers property to someone else without receiving something of equal value in return, this is considered a gift by the Internal Revenue Service (IRS), and it may be subject to gift taxes. The person who gives the gift to someone else (known as the donor) is responsible for filing tax forms for the gift and paying the gift tax.
Gift Tax Exclusions
Certain types of gifts are excluded from taxes, including gifts given to one’s spouse, gifts
The annual exclusion applies to gifts given to an individual person, so if a donor gives multiple people gifts of less than $14,000 each, they will not owe any gift taxes. For spouses, the exclusion is doubled, so a married couple can give a gift of up to $28,000 without owing gift taxes.
In addition to the annual exclusion, everyone is entitled to a lifetime exemption known as the basic tax exemption. For people who die in 2017, that exemption is $5,490,000, and in 2018, the exemption will increase to $5,600,000. The taxable amount of gifts greater than the annual gift tax exclusion threshold can be applied toward this lifetime exemption, and taxes will not be owed on these gifts. However, any amount of the basic exemption used during one’s lifetime will be deducted from the amount of their estate that is exempt from estate taxes upon their death.
Contact a Schaumburg Estate Planning Attorney
Determining how gift taxes will affect your finances and your estate can be a complex undertaking. If you want to make sure you are protecting yourself and providing for your family’s financial security, the skilled attorneys at Drost, Gilbert, Andrew & Apicella, LLC can work with you to ensure you have met your legal requirements and have the financial resources in place that your family needs. Contact our Rolling Meadows estate planning attorneys today at 847-934-6000 to schedule a personalized consultation.
About the Author: Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/ commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.
Source:
https://www.irs.gov/businesses/small-businesses-self-employed/estate-and-gift-taxes
https://www.irs.gov/businesses/small-businesses-self-employed/estate-and-gift-taxes
Starting a business can be a massive undertaking, and it all begins with deciding how you will structure it. For those considering a 
Although the United States is home to just 5 percent of the world’s entire population, it is the location of 31 percent of all 
Medical malpractice cases often contain several different types of compensation. Reimbursement for medical expenses, 
While 
Employers may know the laws that pertain to their business and the rights that their employees possess, but they are not always willing to reveal such information. For example, an employer might not explain to you that you may be entitled to time off work under the Family Medical Leave Act if your child, spouse, or parent becomes ill. Some may even know you are dealing with an illness in the family and refuse to tell you because it would hurt their bottom line.
Today’s family looks much different than those from just 50 years ago. People no longer feel obligated to stay in a marriage that is not working, divorcees sometimes remarry, partners opt for cohabitation over remarriage, and there may be children from one marriage or both. While, in many ways, blended families are a positive thing – especially for kids – it does make estate planning much more complicated than it once was. A 
Parents spend nearly two decades raising their children into adults, but so few are ready to face the truth when adulthood arrives: a child, once cared for and protected by the parent, is now a legal adult. They have all the rights that the parent does, and that includes a right to privacy. Thus, like all other adults, college-aged children need a 
Traumatic brain injury 
As parents age and their children grow up, they begin to face their own mortality. They realize they will not always be around, and that everything they own must be given to a loved one, a charity, or an adult child. Homes are one of the most commonly transferred items after death, but how you do it matters. Learn more about transferring your home to a child, including why simply “putting them on the deed” should never be an option.