Did you give gifts as part of your estate planning strategy? If you gifted significantly to your children, grandchildren, or other loved ones, you need to know whether you are required to file a gift tax return. There are some circumstances that will require a return even if you don’t actually owe any taxes, and it can occasionally be beneficial to file a return even if it is not required. If you have any questions about your gift giving this year and the tax ramifications, discuss your case with our expert tax advisors to be sure you get the most out of your money.

 

You Should File a 2016 Gift Tax Return if Your Gifts:

  • Were to a Section 529 college savings plan for your child, grandchild or other loved one, and you wish to accelerate up to five years’ worth of annual exclusions ($70,000) into 2016.
  • Were of future interests, regardless of the amount.
  • Were of jointly held or community property.
  • Exceeded the $14,000-per-recipient gift tax annual exclusion, other than to your U.S. citizen spouse; or, exceeded the $148,000 annual exclusion for gifts to a non-citizen spouse.
  • Are gifts that you wish to split with your spouse to take advantage of your combined $28,000 annual exclusions.

 

Filing is not required if your gifts consist solely of annual exclusion gifts, present interest gifts to a U.S. citizen spouse, political or charitable contributions, or qualifying medical or educational expenses paid to a school or healthcare provider directly.

 

Sometimes it is not so clear. For example, hard-to-value property like a family-owned business, artwork or interests are not required to file in most cases. However, you may be protected by disclosing them because it will trigger the statute of limitations and typically prevent the IRS from challenging a valuation more than three years after the tax year you file.

 

When is the Deadline?

This deadline is the same as the income tax filing deadline, which is April 18, 2017—unless you file an extension, which moves it to October 16. The payment deadline for gift taxes is April 18 with or without an extension.

 

Contact our expert financial planners at 952-893-9320 or learnmore@BoulayGroup.com to discuss your significant gift giving and the tax ramifications.

 

File Download: Don't Overlook Your Gift Tax Return as the Deadline Approaches