The annual gift tax exclusion is one of the simplest tools for transferring wealth. For 2025, the limit is $18,000 per recipient. That means you may give up to $18,000 to as many individuals as you choose without triggering the need to file a gift tax return or use a portion of your lifetime exemption.
Married couples can combine their exclusions. Together, they may give $36,000 to a child, grandchild, or anyone else, free of gift tax reporting. The recipient owes nothing, and the donor avoids reducing their estate tax exemption.
Keep in mind that gifts above the exclusion do not necessarily generate a tax bill. They simply require the filing of IRS Form 709 and reduce your lifetime estate and gift tax exemption, which in 2025 stands at $13.61 million per person.
The gift exclusion is an annual “use it or lose it” provision. If you do not make the transfer within the calendar year, the opportunity disappears. For families intent on moving wealth efficiently, consistent use of this exclusion can compound into meaningful estate tax savings over time.
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