The gift tax exclusion (a.k.a., the gift tax limit or gift tax exemption) allows you to give money or property each year to family members, friends and others without paying any federal gift tax or even file a gift tax return.
The federal gift tax rates range from 18% to 40%, so avoiding the tax can save you a lot of money. And not having to bother with a gift tax return can save you a lot of time. So, if you're feeling generous, make sure you're aware of the gift tax exclusion limit for 2023.
What's the federal gift tax?
Generally, the federal gift tax applies to all gifts of property by an individual during the year. The tax is typically paid by the person who gives the gift, not the person who receives it. However, if the giver doesn't pay the tax, the recipient may have to pay it. In addition, if the person giving the gift dies before the tax is paid, the estate is responsible for paying the tax.
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