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


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