Farrar Financial Group’s Gift Tax Preparation
It’s your right to give your wealth away to friends, family members, and other people who might need some of what you have. Gifts valued over a certain amount can be taxed, however. It’s important to keep records of which gifts are given away, and how much the gifts are worth. Farrar Financial Group is proud to be able to offer you the services of our tax professionals, who know the ins and outs of how gift tax law works, and can help you prepare for your tax season.
Contact us now at (770) 789-3000 for more information on how we can help you with gift tax preparation.
Gif Tax Specialists Available at Farrar Financial Group
If you have any questions or reservations about the gift tax rules, it’s important to make an appointment with one of our qualified tax professionals. We can give you a detailed run-down of what kind of taxes you or the recipients of your gifts may have to pay. Gift taxes, like all taxes, can be very complicated, especially when it comes to the laws re-lated to gifts that have monetary value, but aren’t cash.
We are happy to provide this kind of specialized service as a part of our tax preparation services.
What Are Gift Tax Rules?
The gift tax was implemented to discourage people from trying to evade estate taxes by giving their assets away before their death. The Internal Revenue Service defines a gift as “any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money’s worth) is not received in return.” A gift that’s given in return for a service, or something like that, isn’t considered a gift by the IRS.
Gift tax is the responsibility of the giver of a gift. However, if the giver doesn’t pay the gift tax for whatever reason, the receiver of the gift will need to pay the gift tax. If a parent gifts an amount to their child that is more than the annual exception rate, the parent can work out a situation where the child needs to pay the gift tax instead of them. The annual exception rate is currently $14,000 per recipient.
Which Gift Tax Forms Do I Need?
If you give a gift of money or a thing that is valued over $14,000, you need to fill out a form. The form is called Form 709. You need to file this form even if you’re taking advantage of the lifetime gift tax exemption. The lifetime gift tax exemption makes it possible to avoid paying gift taxes on assets valued at more than $5.35 million dollars.
However, it’s important to know that every dollar that you exempt from your annual gift tax payments gets taken off the amount you can be exempted on your estate tax after you die. So, if over the course of your life you except $3 million in gifts, you’re only entitled to $2.35 million in estate tax exemption. This can cause problems for your business, family, and other beneficiaries after your death.