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Preparing for Taxes - Use Gifts to Your Advantage

Preparing for Taxes - Use Gifts to Your Advantage

Currently you can make monetary gifts up to $13,000 a year, without tax consequences, up to a $1 million maximum. If you give more than $13,000, those gifts are taxed at 35% (coincidentally that’s the same level as the maximum marginal rate on ordinary income). If you are married, you and your spouse can give up to $26,000 per year to any one individual.

As long as you make gifts of $13,000 or less, you and the recipient are not required to pay taxes on that gift. You can make tax-free gifts to relatives, friends – virtually anyone – as long as you stay within the guidelines. You could help a child with college expenses or with a down payment on a house, or you could simply start “gifting” some of your assets now instead of waiting to pass them on when you pass away.

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