Gift Tax Calculator
Calculate whether a gift is taxable and how much falls under the annual and lifetime exclusion.
US federal gift tax estimator.
The gift tax is a US federal tax on transfers of money or property you make while alive, to prevent people from avoiding estate tax by giving away assets before death. In practice, the vast majority of Americans never pay a single dollar in gift tax, thanks to two generous exclusions.
Key numbers (2025):
- Annual exclusion: $18,000 per recipient per year
- Lifetime exemption: $13.61 million per person
- Top gift tax rate: 40% (only on amounts exceeding the lifetime exemption)
- Gift tax return filing threshold: Any gift to one person exceeding $18,000 in a year
How the system actually works:
Step 1 — Annual exclusion: Gifts up to $18,000 per recipient per calendar year are completely ignored — no tax, no forms, no reporting. You can give $18,000 to as many people as you want in a single year with zero paperwork.
Step 2 — Gifts above the annual exclusion: The excess counts against your lifetime exemption (currently $13.61 million). You must file Form 709 (Gift Tax Return), but you likely still owe no tax until your total lifetime gifting exceeds $13.61 million.
Step 3 — Exceeding the lifetime exemption: Only amounts above $13.61 million are actually taxed, at progressive rates up to 40%.
Special gift tax exclusions (unlimited, no filing required):
| Transfer | Requirement |
|---|---|
| Gifts to US citizen spouse | No limit whatsoever |
| Tuition payments | Must be paid directly to the institution |
| Medical expense payments | Must be paid directly to the provider |
| Gifts to qualifying charities | Fully deductible |
| Gifts to political organizations | Exempt |
Gift splitting — married couples: Married couples can combine their $18,000 exclusions, giving $36,000 per recipient from community funds with both spouses’ consent. This requires filing Form 709 to elect gift splitting, even though no tax is owed.
Worked example: In 2025, you give your daughter $75,000 for a house down payment.
- Annual exclusion: $18,000 (tax-free, no form needed)
- Amount above exclusion: $57,000
- $57,000 reduces your lifetime exemption from $13.61M to $13.553M
- Tax owed today: $0 — you simply file Form 709 to report it
Important — estate tax connection: The lifetime gift tax exemption and estate tax exemption are unified. Gifts that use your lifetime exemption reduce the amount you can pass tax-free at death. The $13.61M exemption is scheduled to revert to approximately $7M in 2026 when the Tax Cuts and Jobs Act provisions expire — consult a tax advisor for estate planning implications.