End of Year Cash Gifts May Offer Tax Advantages

November 27, 2023

Each year you can make gifts that do not affect the amount you can leave to your heirs when you die.  For 2023 you can give anyone $17,000 without having to file a gift tax return.  A couple can give each individual up to $34,000 without having to file a gift tax return.

A gift is income tax free to the recipient.

The amount of annual gifts permitted is scheduled to increase from $17,000 per person to $18,000 per person ($36,000 per couple) in 2024. 

As part of your year-end planning, you may want to make some tax-free gifts.  This is an easy way to decrease your taxable estate. 

Beginning January 1, 2026, the Federal Estate Tax Credit (the amount you can leave to non-spouse beneficiaries) is scheduled to decrease substantially.  It may be advisable to make some tax-free gifts before the Federal Estate Tax Credit decreases. 

In addition, if you plan to make charitable gifts you may want to check with your accountant to see the income tax effect of any gifts made before the end of 2023.  Depending on your tax situation you may want to “bundle your gifts.”  If you do not get any income tax benefit for a gift made in November or December, that same charitable gift made in early 2024 may get you an income tax deduction. 

The Trust and Estate planning team at Gross Shuman PC has decades of experience assisting in the proper planning and execution of trust and estate documents. John F. Leone and his team are just a phone call away. Don’t leave your lifetime of work at risk. Call us today. 716-854-4300 ext. 243 or jleone@gross-shuman.com.