Gift Tax Calculator
Calculate potential tax on gifts and track your annual exclusion limit.
What this calculator does
This calculator estimates the federal gift tax consequences of a transfer. Enter the amount you intend to give and the annual exclusion for the year, and it returns how much of the exclusion is used, how much of the gift is taxable, and the tax that would result.
For most people the useful output is that the taxable figure is not the taxed figure. Amounts above the annual exclusion do not produce a bill; they reduce your lifetime exemption, which runs to millions of dollars per person, and tax only arises once that is exhausted. What the excess does trigger is a filing requirement, which is the obligation people actually miss.
When to use it
Run it before making a substantial family transfer: helping with a house deposit, funding a wedding, paying off a child's student loans, or seeding a business. Knowing whether the gift crosses the annual exclusion tells you whether a Form 709 is coming, which is a paperwork decision rather than a tax one.
It also helps with timing. Splitting a large gift across 31 December and 2 January uses two years of annual exclusion, and if you are married, gift splitting doubles it again, so a transfer that appeared to require reporting can often be structured so it does not. And it argues against a gift entirely: for highly appreciated assets, leaving them in your estate to receive a step-up in basis frequently beats gifting them during life.
Understanding the inputs
Gift amount is the fair market value of what you transfer, not what you paid for it. For property or shares this means the value on the date of the gift, and for anything hard to value a qualified appraisal is worth having, since an inadequately disclosed gift can leave the statute of limitations open indefinitely.
The annual exclusion is the per-recipient, per-year figure, which is indexed and stood at $19,000 for 2025. Enter the amount for the year of the gift, and remember it applies to each recipient separately. If you are married and intend to split the gift, effectively double the exclusion, but be aware that gift splitting requires a filed election.
How is this calculated?
Taxable Gift = Amount − Annual Exclusion ($18,000 for 2024).
A worked example
Suppose you give a child $75,000 toward a house in 2025, when the annual exclusion is $19,000. The exclusion covers the first $19,000, leaving $56,000 as a taxable gift. No tax is payable: the $56,000 simply reduces your lifetime exemption from roughly $14 million to roughly $13.94 million. A Form 709 is still required for the year.
Structured differently the outcome changes. If you are married and elect to split the gift, the combined exclusion covers $38,000 and only $37,000 uses lifetime exemption. Give $19,000 in late December and $19,000 in early January and two years of exclusion apply. And if the money were instead paid directly to a university for tuition, it would be excluded entirely with no reporting at all.
Limitations and assumptions
This is an estimate, not tax advice, and the IRS is the authority. It applies the annual exclusion mechanically and does not track your cumulative lifetime exemption usage across previous years, which is what actually determines whether tax is ever due. Anyone approaching the exemption should be working from filed Forms 709, not a calculator.
It does not handle gift splitting elections, the direct tuition and medical exclusions, gifts to trusts and the Crummey withdrawal rights that make them qualify for the annual exclusion, valuation discounts on closely held business interests, generation-skipping transfer tax, gifts to non-citizen spouses, or state-level gift and inheritance taxes. The lifetime exemption amount is set by legislation, has changed substantially in recent years, and is scheduled to change again, so confirm the current figure. Any gift large enough to consume exemption warrants an estate attorney.
Common Questions
- Who pays gift tax, the giver or the receiver?
- The donor, in almost every case. Recipients do not report gifts as income and owe nothing. That surprises people, but the tax exists to stop estates being given away before death, so it targets the person transferring wealth. In rare arrangements the recipient can agree to pay, but that is unusual and must be documented.
- How much can I give without any reporting?
- Up to the annual exclusion per recipient per year, which was $19,000 for 2025 and is indexed upward in $1,000 increments. It resets every 1 January and applies separately to each person you give to, so gifts to four different people multiply the total you can pass tax-free without touching a return.
- Do I owe tax if I exceed the annual exclusion?
- Almost certainly not. Amounts above the exclusion are deducted from your lifetime exemption, which is in the millions per person, and tax is only due once that entire exemption is used. What you do owe is a filing obligation: Form 709 must be filed for the year, even when no tax results.
- Can a married couple give twice as much?
- Yes, through gift splitting. Each spouse has their own annual exclusion, so a couple can jointly give double the individual amount to any one recipient. If the money comes from one spouse's account, the election to split must be made on Form 709 and both spouses must consent, so the return is still required.
- Are tuition and medical payments treated differently?
- Yes, and this is the most underused rule in the code. Payments made directly to an educational institution for tuition, or directly to a medical provider for care, are entirely excluded regardless of amount and do not count against the annual exclusion. The payment must go to the institution, not to the student or patient.
- What is the five-year election for 529 plans?
- A 529 contribution can be treated as if made evenly over five years, letting you front-load five annual exclusions into a single contribution without using lifetime exemption. It requires an election on Form 709, and further gifts to the same beneficiary in those five years use exclusion you have already spent.
- Does the recipient inherit my cost basis?
- Yes, and this is why gifting appreciated assets during life can be worse than leaving them at death. A gift carries over your original basis, so the recipient owes capital gains tax on the full appreciation when they sell. Assets inherited at death generally receive a step-up to market value, wiping that gain out.
- Are gifts to a spouse or charity taxable?
- Gifts to a US citizen spouse are unlimited and entirely exempt under the marital deduction, as are gifts to qualifying charities. A different, capped annual limit applies to gifts to a non-citizen spouse, which catches people out in international marriages and is one of the areas where professional advice is genuinely necessary.
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