Are Holiday Gifts Subject to Federal Gift Tax?

Web Admin - Thursday, December 21, 2017
Barrington estate planning and tax lawyerThe 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 given to a political organization, and tuition or medical expenses paid on someone’s behalf. For other gifts, an annual exclusion threshold applies. That threshold is $14,000 for 2017, and the threshold for 2018 will be $15,000.

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.


Estate Planning and the Annual Gift Tax Exclusion

Web Admin - Friday, December 23, 2016

When you have a moderate to large estate, it is important to ensure that you utilize every money-saving strategy possible. One of the more popular is the annual gift tax exclusion, which is often given to family, friends, and charities around the holiday season. The following offers more information about the annual gift tax exclusion in Illinois, and how you can use it in your estate plan to benefit your beneficiaries now, and far into the future. 

Understanding the Importance of Exclusions  

Upon your death, all of your estate assets will be inventoried and valued. This analysis is done to determine if any state or federal taxes may be owed on the estate. In some instances - in particular, estates for which few to no exclusions were used - the tax burden could significantly decrease the final value of the estate. There are even instances in which the entire estate must be liquidated to meet the tax obligations. The use of annual gift tax exclusions can mitigate this potential issue, and may leave more of your legacy behind for those you intend. In some instances, effective planning may even eliminate any final tax debt altogether. Keep in mind, however, that there are limitations, exemptions, and rules that must be adhered to when using the annual gift tax exclusions. 

Utilizing the Annual Gift Tax Exclusion in Your Estate Plan 

To reduce their federal tax obligations upon death, taxpayers may transfer up to $5.45 million in their lifetime (increasing to $5.49 million in 2017) to their heirs, tax-free. Annually, the maximum amount of tax-free gifting is currently set at $14,000. However, couples may combine their gift exclusion and donate up to $28,000 per year to the heirs of their choosing. Keep in mind that your estate will not be granted any additional tax benefits once you have reached the lifetime limit - unless, of course, the lifetime exclusion is raised. It is also important to understand that poorly planned gifts may not offer the same amount of benefit to you or your heirs. An attorney can help you determine which options may be most suitable for your situation. 

Contact Our South Barrington Estate Planning Lawyers 

At Drost, Gilbert, Andrew & Apicella, LLC, we know how important it is to plan for the future. Skilled and experienced, we can help you utilize creative estate planning solutions that benefit your heirs and preserve your legacy. Learn more about how our South Barrington estate planning lawyers can assist you. Call 847-934-6000 to schedule your personalized consultation today.

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.


Recent Posts


Illinois will lawyer Inverness real estate lawyer pedestrian accident Rolling Meadows insurance attorney Transfer on Death Instrument license suspension insurance agents sole proprietorship Schaumburg Illinois insurance dispute lawyers medical malpractice, missed diagnosis, delayed diagnosis, medical mistake, Deer Creek medical malpractice lawyers Rolling Meadows tax attorney Rolling Meadows personal injury lawyers commercial real estate estate planning for college students Deer Park criminal attorney Crystal Lake business law attorneys Palatine civil attorney Kenilworth estate planning lawyer health insurance dispute Long Grove real estate attorney Illinois home inspection Exclusions employment contract Chicago employment lawyer attorney fees Rolling Meadows employment attorney Des Plaines insurance attorney new real estate form personal injury claim Inverness estate planning lawyer Thanksgiving Barrington medical malpractice lawyers deadly crashes rollover accidents products liability Palatine personal injury lawyer DUI penalities rumble strips right to work Palatine punch death medication errors Rolling Meadows boating crash lawyer drug crimes filing a medical malpractice claim Long Grove real estate lawyer car accident probate claims process Arlington Heights personal injury attorney insurance denials Crystal Lake civil litigation lawyer estate planning lawyer pet law Crystal Lake estate planning lawyer pedestrian accidents Palatine workers compensation lawyer Rolling Meadows wrongful death overtime pay Chicago trucking accident attorney home inspection lawyer murder charges Attorney Ken Apicella Illinois medical malpractice claim life insurance lawyer trusts Long Grove estate planning attorney involuntary manslaughter Illinois traffic ticket lawyer Palatine trusts lawyer Illinois collections attorney personal injury, auto accident injuries, delayed injuries, serious injuries, Des Plaines personal injury attorneys Rolling Meadows DUI lawyer Crystal Lake tax lawyer pay when paid contract Schaumburg estate attorney driving Des Plaines personal injury attorney Inverness accident lawyer workplace sexual harassment Schaumburg civil litigation attorney federal crimes llinois Real Estate Lawyers Association sexual harassment boating under the influence insurance denial appeals compensatory time Rolling Meadows traffic law firm paid sick leave Schaumburg estate planning attorney Policy Cancellation Legal Info capital gains tax Arlington Heights estate planning attorney Inverness real estate attorney Illinois pet lawyer distracted driving accidents Arlington Heights personal injury lawyer living trust Chicago lawyer Des Plaines drug lawyer ObamaCare Illinois civil litigation lawyer Illinois insurance attorney consent to a search Inverness insurance attorney Arlington Heights trucking lawyer brain injury guardianship attorney Home Remodeling Repair Act car collision employee misclassification medical malpractice compensation Illinois trucking safety insurance claim denials wrongful termination, employment law, whistleblower protections, Illinois employment laws, discrimination in the workplace Des Plaines DUI attorney Illinois employment law real estate zoning taxes car accidents DUI attorney Schaumburg injury lawyer life insurance policy Arlington Heights car accident lawyer Schaumburg estate planning lawyer special needs trust privacy laws insurance negligence drugs bicycle accidents Illinois Human Rights Act caretaker rights employment attorney Deer Park real estate law firm trucking accidents Crystal Lake criminal defense attorney Barrington employment attorney Illinois elder law attorney defective products Rolling Meadows traffic attorney Illinois registered agent auto accidents Chicago biking tips vacation home fines Illinois employment law attorney civil litigation real estate attorney Des Plaines claims law firm TBI Arlington Heights lawyer subcontractor natural gas explosion Palatine employment law lawyer rest breaks Crystal Lake insurance lawyer fiduciary rule delay caregiver wrongful termination Illinois estate planning attorney Illinois workers compensation attorney problem employees holiday statistics Illinois Smoke Detector Act living trust benefits Rolling Meadows litigation lawyer icy parking lots CAM Deer Park workers compensation lawyer trust payments severance agreements car crashes Inverness corporate attorney Schaumburg drug defense lawyer Colin H. Gilbert Employment Discrimination Law Illinois employee rights attorney. landlord tenant law DNR pain and suffering Rolling Meadows medical malpractice lawyers internet condo criminal defense Illinois attorney car accident lawyer business litigation investment property Des Plaines criminal attorney rollover car crashes Illinois construction accident attorney Illinois Probate Act of 1975 Crystal Lake medical malpractice lawyer Illinois injury lawyer Illinois insurance claim dispute lawyers jet ski Illinois trusts attorney motorcycle accident real estate attorneys Illinois Wage Payment and Collection Act Rolling Meadows marijuana attorney GM ignition switches Chicago estate planning lawyer Deer Park personal injury lawyer liability Fourth of July Colin Gilbert head on collisions Rolling Meadows personal injury attorney Deer Park motorcycle accident lawyer Rolling Meadows personal injury lawyer Arlington Heights TBI attorney fatal car accidents DGAA Illinois insurance claim attorney automated cars Arlington Heights insurance attorney deed transfer corporate law Barrington drug crime attorney FSLA cell phone tower data dealing with problem employees Illinois workplace lawyer Schaumburg employment attorney estate planning attorney traffic deaths Long Grove estate planning attorneys Buffalo Grove car accident lawyer forming a corporation in Illinois expungement Illinois living will dog bites landlord Crystal lake insurance dispute attorney Deer Park traffic accident attorney Detainer Actions medical malpractice claims Chicago traffic lawyer drug crime spinal cord injury golf accidents Crystal Lake accident attorney Buffalo Grove traffic lawyers traffic crimes Illinois insurance claim dispute lawyer power of attorney for healthcare underfunded trust workers comp Rolling Meadows probate lawyer IRA benefits commercial leasing insurance attorney construction accidents slip and fall accidents Illinois traffic laws Chicago estate planning Illinois car accident attorney comparative negligence Arlington Heights wills and trusts attorney low-ball insurance settlement Jay Andrew first degree murder Crystal Lake medical malpractice attorneys Illinois rollover accident lawyers Illinois real estate Deer Park employment law attorney Schaumburg medical malpractice lawyer probate lawyer criminal record Crystal Lake personal injury lawyer Food and Drug Administration's Food Safety Modernization Act Illinois medical malpractice case fiduciary rule Home Sale Contingencies trench injuries Buffalo Grove insurance claim dispute lawyers work unions contracts Palatine real estate lawyer insurance claims Des Plaines medical malpractice attorney Chicago employment attorney Chicago insurance claim attorneys Buffalo Grove personal injury attorney Inverness civil lawyer agent wills and trusts Buffalo Grove criminal defense lawyer Palatine criminal defense lawyer homestead rights gift taxes Des Plaines mass shooting Buffalo Grove injury lawyer car crash murder wills civil rights violation medical research real estate employee rights construction accidents, personal injury, wrongful death, Arlington Heights personal injury attorneys, workers' compensation Illinois pedestrian accident attorney independent contractor distracted driving accident victims Illinois traffic attorneys no contest clauses Palatine civil litigation lawyer Illinois probate lawyer license reinstatement Rolling Meadows drug defense attorney Inverness traffic law firm liability claims living trust vs will DUI workers compensation estate planning trusts drunk driving bad faith insurance claims estate planning traffic laws Palatine law firm Barrington Illinois estate planning lawyer Crystal Lake car accident attorney suspended license Barrington business law firm Crystal Lake law firm Barrington criminal lawyer employment law, meal breaks, rest breaks, hotel employees, Des Plaines employment law attorneys personal injury accidents minimum wage life insurance claims School Visitation Rights Act Buffalo Grove law firm Chicago insurance law firm advance healthcare directive Palatine employment attorney Schaumburg insurance lawyers South Barrington real estate attorney Chicago corporate attorney Inverness elder law lawyer unfunded trust probate process Illinois DUI attorney Inverness injury lawyer blood alcohol content fault based insurance breathalyzer test premises liability employment lawyer institutional trustee installment contracts hiring employees field sobriety test preventable medical errors estate attorney loss of consortium traffic violations Arlington Heights medical malpractice lawyer Illinois red light cameras medical malpractice Deer Park accident attorney Arlington Heights wills and trusts attorneys probate fees Illinois corporate lawyer Illinois lawyer Inverness DUI lawyer Des Plaines personal injury lawyer traumatic brain injuries boating accidents Palatine traffic lawyer insurance disputes Schaumburg elder law lawyer Illinois employment lawyer Rolling Meadows criminal attorney college kids living wills in terrorem provision marijuana Rolling Meadows insurance dispute lawyers Arlington Heights injury attorney Arlington Heights wills and trusts lawyer revenge porn creditors Rolling Meadows Traffic Lawyer motorcycle accident lawyer Schaumburg criminal law attorney personal injury claims Illinois boating accident lawyer Affordable Care Act Arlington Heights Attorney Illinois LLC creation unpaid assessment insurance claim delay denied insurance claim IRS Barrington employment law firm product liability Illinois small business Class A misdemeanor jet ski accidents Crystal Lake medical malpractice law firm Rolling Meadows car accident lawyers Palatine employment lawyer Schaumburg traffic lawyer mortgage job lawyers Des Plaines drug crimes lawyer Rolling Meadows criminal lawyer spinal cord injuries Mount Prospect elder law attorney healthcare claims Palatine elder law attorney Illinois job attorney Schaumburg probate attorney Illinois personal injury attorney Schaumburg Attorney cell phone accidents Palatine drug lawyer financial advisors crossover accidents trauma after an accident real estate leasing wage theft BAC Illinois tax attorney Arlington Heights tax lawyer Crystal Lake car accident lawyer employment law Rolling Meadows insurance dispute lawyers, insurance dispute employment contract, employment law, employment at-will, Deer Park employment law attorneys, contract, Palatine corporate attorney Illinois defective products attorney South Barrington real estate lawyer PTSD Illinois insurance lawyer Buffalo Grove medical malpractice lawyers Super Mario elder abuse appealing an insurance claim Illinois Sales Representative Act Mt Prospect Attorney denial of life insurance insurance dispute attorney traffic violations defense Barrington estate planning lawyer pregnant women Mount Prospect real estate lawyer DMV Fair Labor Standards Act Crystal Lake pet attorney Illinois wills and trusts attorneys Barrington personal injury lawyer criminal law Des Plaines real estate lawyer medical marijuana insurance claim denial Deer Park DUI lawyer Chicago car accident lawyer POA Buffalo Grove real estate attorney texting while driving elder law hands free device Rolling Meadows real estate attorney digital evidence condo association IRELA Illinois jet ski accident lawyer dynasty trusts Illinois traffic attorney Des Plaines civil attorney Barrington workers compensation attorney meal breaks Rolling Meadows insurance lawyer rent to own real estate contracts Rolling Meadows employment law attorney personal injury lawyer Crystal Lake traffic lawyer speeding insurance claim dispute attorney pedestrian-automobile accident traumatic brain injury healthcare irrevocable trust digital assets Schaumburg personal injury attorney senior citizens traffic offenses Schaumburg employment law attorneys ken apicella Chicago will attorney blended families Arlington Heights employment attorney employee discrimination Illinois business lawyer Illinois bicycle safety Landlord Tenant Ordinance Crystal Lake employment law attorney liens car accident lawyers Kenilworth estate planning attorneys underage DUI Palatine probate lawyer bike accident Arlington Heights accident attorney Palatine Attorney child safety Barrington personal injury attorney Illinois law traffic accidents Schaumburg construction accident lawyer real estate contract Crystal Lake employment attorney Rolling Meadows Attorney Palatine construction attorney Do Not Resuscitate Illinois business law atorneys Barrington criminal defense lawyer whistleblower protections Illinois medical malpractice attorney workers compensation benefits ACA breach of contract pet bites life insurance IRA trust transfer Crystal Lake personal injury attorney Illinois employment law firm Illinois traffic accident lawyer Illinois Transfer on Death Instrument Barrington boating accident attorney digital media accounts, estate planning, Arlington Heights estate planning attorney, Illinois Workers’ Compensation Commission criminal Mount Prospect wills and trusts lawyers digital assets, digital fiduciary, estate planning, digital content, Long Grove estate planning lawyers gift tax exemption, estate planning, estate planning strategies, Illinois estate planning, South Barrington estate planning attorneys license Illinois employment laws trustee unauthorized overtime construction contracts Crystal Lake injury attorney Des Plaines real estate attorney pizza emoji Palatine business attorney real estate lawyer sexual images estate tax Illinois real estate lawyer Buffalo Grove traffic attorney eluding a police officer Barrington injury attorney insurance claim Deer Park traffic lawyer Arlington Heights Traffic Lawyer real estate closing digital information Arlington Heights car crash attorneys Illinois insurance disputes privacy Crystal Lake will lawyer Forcible Entry Illinois motorcycle accident lawyer changes to mortgage law Crystal Lake bike accident lawyer Illinois wrongful termination lawyer Buffalo Grove probate lawyer BAIID Family Medical Leave Act Schaumburg corporate attorney pedestrian injuries, pedestrian fatality residential real estate estate plan car crash injuries Buffalo Grove employment lawyer Buffalo Grove personal injury lawyer Illinois medical malpractice lawyers Illinois mortgages Arlington Heights employment law attorneys insurance agent negligence estate planning, death tax, succession plans, business estate plans, Barrington estate planning lawyers Illinois estate planning law firm Federal Food Drug and Cosmetic Act commercial leases truck collisions Riverwoods estate planning lawyer Palatine insurance lawyer controlled substance Des Plaines collections attorney Schaumburg personal injury lawyer Palatine injury attorney dram shop law Palatine corporate law attorneys food poisoning Chicago will attorney, social media platforms, Illinois estate planning lawyer, hit and run accident income distribution deducation reckless homicide employment law, Illinois employment laws uninsured motorist Illinois personal injury lawyer Schaumburg real estate lawyer bicycle dooring accidents probate claims Kenilworth estate planning attorney Des Plaines pet law attorney Barrington Traffic Lawyer surgical mistakes nursing home negligence operating agreements Arlington Heights real estate lawyer Illinois workplace discrimination attorney civil litigation attorney Whistleblower Claims accidental death benefits estate planning, digital assets, Revised Uniform Fiduciary Access to Digital Assets Act, Illinois digital assets, Illinois estate planning, Rolling Meadows corporate lawyer Barrington real estate lawyer disability benefits DUI defense slip and fall insurance claim dispute Chicago attorney insurance dispute Crystal Lake employment lawyer defective products lawyer Illinois employment attorneys Joliet general practice lawyers Arlington Heights traffic attorney Arlington Heights pedestrian accidents Barrington attorney Illinois Long Grove wills and trusts attorneys Illinois personal injury lawyers drug possession texting and driving personal injury law firm Des Plaines accident attorney Schaumburg car accident attorney Self-Directed IRA Accounts personal injury attorney drunk driving statistics Rolling Meadows accident lawyer Illinois personal injury natural gas anesthesia errors unpaid overtime cell phone overtime violations comp time Des Plaines personal injury lawyers swimming pools Inverness personal injury attorney social media after death Retaliatory Discharge traffic tickets small business FMLA foreclosed rental property Rolling Meadows employment law attorneys Illinois speeding lawyer manufacturing Illinois insurance claims lawyers tax attorney owner responsibility Des Plaines Traffic Lawyer Arlington Heights criminal lawyer Illinois workers compensation lawyer Barrington civil litigation attorney insurance adjusters startup company Crystal Lake traffic attorney probate foreclosure Des Plaines tax law firm loopholes Schaumburg personal injury lawyers Illinois employment law attorneys Schaumburg criminal attorney personal injury insurance disputes, Illinois insurance disputes, Illinois insurance dispute attorneys, denied insurance claims, Arlington Heights insurance dispute attorneys Illinois criminal defense attorney vacation home Des Plaines injury law firm Barrington estate planning attorney Illinois estate planning murder defense preventing accidents license revocation trucking accident lawyers Rolling Meadows business lawyer modern family estate planning Liquor Control Act Illinois wills and trusts back injuries Barrington litigation attorney Arlington Heights wills and trusts lawyers Des Plaines motorcycle accident attorney power of attorney Long Grove estate planning Rolling Meadows estate planning attorney Barrington employment law attorney Palatine estate planning lawyer insurance dispute, insurance dispute lawyers, insurance claim denial, insurance claim delays, Rolling Meadows insurance dispute attorneys LLCs Illinois driving without license underinsured motorist Crystal Lake pedestrian accident lawyer Buffalo Grove corporate attorney denied insurance claims Inverness probate lawyer Palatine traffic accidents clemency employees Deer Park medical malpractice attorney Schaumburg wrongful death attorney BUI marijuana crimes attorney federal regulations for LLCs boating DUI drug crimes lawyer