Did you buy your daughter a brand new car? Did you help your other daughter purchase a home by making the down payment on her behalf? Did you pay your son's rent for the year? Do you need to report these gifts to the IRS?
Whether a gift tax return is required depends on the value of your gift. If you made gifts to any individual of more than $15,000 in 2021, you are required to report those gifts on a Form 709. Gifts include not only cash gifts but also paying for things such as rent, clothing, food at restaurants, or Christmas gifts and birthday presents. The $15,000 limit is a per person rule. If you give one person $15,001, then you need to report the extra $1. However, if you give 10 people $15,000 or less, you do not need to file a return. Except in very rare cases, beneficiaries do not need to file a tax return if they receive gifts.
If you have questions about whether the IRS is requiring you to file a gift tax return, please call your accountant or call Rehberg Law Group at 206.246.8772 to speak with one of our attorneys. Gift tax returns are required to be filed with your income tax return the year following the gift. Please make sure to contact your accountant or attorney early enough to file your gift tax return on time this year.