Annual Federal IRS Gift Tax Deductions for 2011, 2012

The person who gives the gift is usually responsible to pay the gift tax although, in certain circumstances, the person receiving the gift may make special arrangements to pay the gift tax. If you want to set up this type of an arrangement, it is advised that you do the research before you get started.

The gift tax laws and their rules can be some of the most complicated tax deduction issues in the IRS code.

Exceptions to the Rule of Gift Tax

Usually any gift is a taxable gift but, once again there are many exceptions to this rule. Some things can be excluded as gifts. Any gift that is not more than the annual exclusion for the entire year. If you pay for someone’s tuition or medical expenses you can take advantage of the educational and medical exclusions.

Other exclusions could be gifts to your spouse, a political organization, and of course any gift to a qualified charitable organization.

Are Gifts Deductible on my Income Tax Return?

Gifts that are given to qualified charitable organization are deductible. You can always go to the IRS and look up Publication 950, Introduction to Estate and Gift Tax. You can give monetary gifts up to the annual exclusion amount before being taxed, but you must be aware of the lifetime limit amount. If you exceed your limit, you will be taxed.

Questions About Annual Federal IRS Gift Tax Deductions

If you have questions about federal gift tax deductions, you can use the professional income tax preparation software at Turbo Tax Online. Try the free tax calculator and you’ll have a better idea of where you stand in your income tax return. They also have an audit alert system that will let you know if something doesn’t look quite right. You may have additional questions like:

· How Many Annual Exclusions are Available?

· What Information Do I Include With the Tax Return?

· How Do I Determine Fair Market Value?

· What if I Sell Property That Was Given To Me?

If you want to simplify the gift tax deduction process on your federal income tax return, then give TurboTax Online a try today. Their professional tax experts will be able to get the biggest deduction for you and that’s guaranteed!