IRS Gift Tax Limit for 2011, 2012

If you are someone who regularly gives away large amounts of money or property, then it is important for you to be familiar with the IRS gift tax limits. The gift tax limits are set in place by the IRS, so your gifts are taxable only above a certain amount.

Currently the IRS will allow you to give away up to $13,000.00 annually without having to pay any tax on the gift. This $13,000.00 can be given to one person or any number of people. If you are married, then this amount increases to $26,000.00.

One important thing to remember is that the recipients of your gift will never have to pay any tax on the gift. If the giver of the gift goes above the IRS gift tax limit amount, the giver will pay the gift tax on the gift.

How Much Can I Give In a Lifetime?

You are allowed to give up to one million dollars in gifts above the annual limit in your lifetime without having to pay taxes. This means you need to plan carefully to ensure you do not exceed your annual limit as well as your lifetime limit.

Why Is There an IRS Gift Tax?

The gift tax was imposed to prevent taxpayers from giving away everything they own before they die to avoid paying estate tax. If you do go beyond the gift tax limit, then you could be taxed as high as 45%. So be careful with the amounts you are giving away.

We suggest using an online tax preparation service such as TurboTax 2011, 2012 to help you calculate the amount you have given away and if you owe any tax on those gifts. You can visit the web site of TurboTax and click on the support tab to gain access to their award winning library of tax information. Once you're on the support page, you can enter, IRS gift tax limit, and you will have answers to any questions you may have.