Before 2014 comes to a close, it is important for those with extra cash or assets on hand to consider using the annual gift tax exclusion of $14,000 per year per recipient. A married couple can give $28,000 to any person without filing a gift tax return. Gifts must be made and checks deposited by December 31, 2014, so if you would like to use this exclusion, gifts should be provided a little before December 31, 2014 if a check is being used. The number of donees is unlimited, so a couple or person can give as many $28,000 or $14,000 gifts to as many people as they want.
It is also important to note that the $14,000 exclusion do not include the payment of education or medical expenses when payment is actually made to the institution and not the person. For example, if you pay $20,000 directly to a college for your grandchild’s education, this would not be included as a “gift” for gift tax purposes.
Prior to making gifts that are larger than the annual exclusion, you should contact your accountant for tax advice regarding such gifts.