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What is the Annual Gift Tax Exclusion Amount?

By January 26, 2023Gift Tax, Tax, Taxes

What is the Annual Gift Tax Exclusion Amount?


What is the annual gift tax exclusion amount in 2022? The amount is $16,000 per person, and in 2023 it’ll be $17,000 per person. 

What does that mean? It means that you can give up to $16,000 to as many people as you want, and it will not affect your future estate taxes, and you don’t have to file a gift tax return. It’s not taxable to you. 

And gifts to recipients are never taxable to them, so anytime you make a gift to the recipient, they know don’t ever pay income tax on that. Something a lot of people don’t understand. 

If you make a gift above $16,000, it doesn’t mean that’s taxable either. It just means that you should file a gift tax return. And if you do that, what will happen is it will reduce your lifetime amount, your exemption amount, lifetime exemption amount now is over $12 million per person. So most people can afford to make those gifts without having a big taxable estate at the end of their lives.

Mike Garry

Author Mike Garry

Michael Garry is a CERTIFIED FINANCIAL PLANNER™ practitioner and a NAPFA-registered Financial Advisor. He is a member of the National Association of Personal Financial Advisors (NAPFA) and the Financial Planning Association (FPA).

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