Who Form 8865 Exclusion 2023-2024

Hi, this is Fred Neiman, a member of the Neiman family and a lawyer at a central New Jersey law firm. Our firm specializes in state tax reduction in all 21 counties of New Jersey. Today, I want to address a common misconception surrounding the $14,000 annual gift tax exclusion. Many people ask me if they can give money away without paying gift tax, and the answer is yes. You can make a tax-free gift of up to $14,000 per person without using any of your lifetime exclusion from the state or inheritance tax. You may be wondering what I mean by "lifetime exclusion". Let me explain. The federal government raised the exemption amount, which is the limit below which US residents do not have to pay the death tax, to $5,300,000 in 2014. This amount is indexed for inflation each year thereafter. However, in New Jersey, a high-tax state, the exemption amount is only $675,000. To minimize the amount of money subject to the death tax, you can make gifts without using up any of your exclusions. If you have more than $675,000 or $5,300,000, you can make gifts of up to $14,000 per person each year. For example, you can give $14,000 to ten people in one year, totaling $140,000, without using up any of your exclusions. You can even make gifts to a hundred people at $14,000 each without impacting your state or federal exclusions. This is where the significance of the $14,000 figure comes in. However, there's a catch. If you don't have an estate worth more than $675,000 or you're comfortable paying some New Jersey tax on amounts between $675,000 and $5,300,000, you can gift as much as you want. For instance, if your estate is worth $500,000, you can gift it all without any tax implications for you...