You have worked hard your whole life, and you’ve done well. You’ve saved til it hurt, and you have more than you will need. Now you want to pay it forward and give some help to your children or grandchildren. You want to teach them about compounding and maybe about getting out of debt. So you have decided to give them a tax-free gift. But how much is the right amount? At Kiplinger, Kelley R. Taylor explains the details of the 2025 gift tax rules, writing:
The IRS announced increases in gift and estate tax exemptions for 2025. The annual gift tax exclusion rises to $19,000 per recipient, up $1,000 from last year’s limit.
(These are the numbers you’ll refer to when planning your 2025 tax liability, returns typically filed in early 2026.)
- Individuals can give up to $19,000 to any number of people in 2025 without triggering gift tax reporting requirements.
- Married couples can effectively double this amount to $38,000 per recipient.
For example, if you are married and have two married children and two grandchildren, you and your spouse can give up to $38,000 to each of your kids, their spouses, and the grandchildren last year without having to file a gift tax return or pay any tax. This means you could give a total of $228,000 in tax-free gifts.
Remember: staying under these limits per recipient exempts you from filing a gift tax return for the year. However, the annual limit is time-sensitive, meaning you need to make 2025 gifts by Dec. 31, 2025.
Action Line: When you want to talk about saving til it hurts, graduating to retirement, and teaching your children and grandchildren about the power of compounding, email me at ejsmith@yoursurvivalguy.com. And click here to subscribe to my free monthly Survive & Thrive letter.
