• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • Our Firm
    • About Our Firm
    • Attorney and Staff Profiles
  • Services
    • Asset & Business Planning
    • Dental Practice Law
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Family-Owned Businesses & Farms
    • Financial Planning Assistance
    • Incapacity Planning
    • IRA & Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Medicaid and Elder Law
    • SECURE Act
    • Special Needs Planning
    • Trust Administration
  • Elder Law
    • Coping With Alzheimer’s
    • Emergency Medicaid & Nursing Home Planning
    • Guardianship & Conservatorship
    • Hospice Care
    • Medicaid Planning
    • Veteran’s Benefits
  • Resources
    • DocuBank
    • Elder Law
      • Elder Law & Medicaid Definitions
      • Elder Law Reports
      • Elder Law Resources
        • Carmel, Indiana Elder Resources
        • Fishers Indiana Elder Law Resources
        • Greenfield, Indiana Elder Law Resources
        • Greenwood Elder Resources
        • Indianapolis Elder Law Resources
        • Lawrence Elder Law Resources
        • Plainfield Elder Resources
        • Zionsville Elder Law Resources
    • Estate Planning
      • Estate Planning Checkup
      • Estate and Gift Tax Figures
      • Estate Planning Definitions
      • Estate Planning Reports
        • Advanced Estate Planning
        • Basic Estate Planning
        • Estate Planning for Niches
        • Trust Administration
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Free Estate Planning Worksheet
    • Frequently Asked Questions
      • Alzheimer’s and Dementia
      • Asset Protection Planning
        • Business Succession Planning
      • Challenging an Indiana Will
      • Elder Abuse
      • Elder Law
        • Medicaid
        • Medicaid Planning
        • Planning for Long-Term Care
      • Estate Planning
        • Avoiding Estate Taxes
        • Estate Planning for Parents
        • Frequently Asked Questions for Families Without an Estate Plan
        • LGBTQ Estate Planning
        • Women and the Need for Estate Planning
      • Financial Planning
      • How Divorce Impacts Your Estate Plan
      • Incapacity Planning
      • Legacy Wealth Planning
      • Pet Planning
      • Philanthropy in Your Estate Plan
      • Probate
      • Power of Attorney
      • Serving as Trustee
      • Small Estate Administration
      • Trusts
        • Trust Administration
        • Trust Administration
        • Serving as Executor
      • Testamentary Trusts
      • Understanding Your Social Security Retirement Benefits
      • Updating Your Estate Plan
      • Veteran Benefits
      • Wills
        • Contesting a Will
    • Newsletter
    • Pre Consultation Form
    • Probate and Trust Administration
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss Of A Loved One
      • Probate Resources
        • Carmel, Indiana Probate Resources
        • Greenfield Probate
        • Greenwood Probate
        • Indianapolis Probate
        • Plainfield Probate
        • Indiana Probate
        • Zionsville Probate
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
  • Reviews
    • Our Reviews
    • Review Us
  • Areas We Serve
    • Boone County
      • Lebanon
      • Zionsville
    • Hamilton County
      • Carmel
      • Fishers
    • Hancock County
      • Greenfield
    • Hendricks County
      • Brownsburg
      • Plainfield
    • Johnson County
      • Franklin, Indiana
      • Greenwood
    • Marion County
      • Central Indiana
      • Indianapolis
  • Blog
  • Contact Us

Frank & Kraft, Attorneys at Law

Indianapolis Estate Planning Attorneys

CONNECT WITH US TODAY(317) 684-1100

Attend a Free Workshop
Home » Annual Gift Tax Exclusion Will Stay the Same in 2016

Annual Gift Tax Exclusion Will Stay the Same in 2016

December 29, 2015Estate Planning, Taxes

Annual Gift Tax Exclusion Will Stay the Same in 2016

When you give someone a cash gift, you are passing along money that you have left after you paid your taxes. It would be logical to assume that you can give gifts without any further tax consequences, but in reality, there is a gift tax in place.

Fortunately, the tax is not a factor for most people, because there are exclusions that can be used to give a certain amount in a tax-free manner. One of these is the annual gift tax exclusion. This exclusion allows you to give a certain amount to any number of people within a calendar year tax-free.

There have been periodic increases to the amount of this exclusion, but there will be no increase applied in 2016. The gift tax exclusion will remain constant at $14,000 per gift recipient.

There are a couple of other exclusions that many people are not aware of that we should touch upon here. If you want to pay school tuition for students, you can do this without incurring any gift tax exposure. However, this exclusion does not extend to books, fees, and living expenses.

You could use your $14,000 per person annual exclusion to provide some extra support, and if you are married, you and your spouse could give a total of $28,000 to any number of people tax-free within a calendar year.

In addition to the educational exclusion, there is also a medical gift tax exclusion. You can pay medical bills for others without being taxed for your generosity, and this exclusion extends to health insurance purchases.

Unified Lifetime Exclusion

The gift tax is unified with the estate tax, and there is a unified lifetime gift and estate tax exclusion that is completely separate from the annual gift tax exclusion. If you wanted to give gifts to individuals during a calendar year that exceeded $14,000 per person, you could use portions of this exclusion to give the gifts in a tax-free manner.

However, if you use up your exclusion giving tax-free gifts, there would be less to apply to your estate. In 2016, the unfied lifetime federal transfer tax exclusion is $5.45 million. This represents a $20,000 increase over the $5.43 million that was in place in 2015.

Gifting for Tax Efficiency

If your estate is going to be exposed to the estate tax, you could use your annual $14,000 per person exclusion to transfer assets in a tax-free manner. As you are giving the gifts, you would also be reducing the value of your estate, so there would be less to tax after you are gone.

Schedule a Consultation

If you would like to discuss your tax situation or any other estate planning matter with a licensed professional, feel free to contact us through the following page to schedule a consultation: Indianapolis IN Estate Planning Attorneys.

  • Author
  • Recent Posts
Paul A. Kraft, Estate Planning Attorney
Paul A. Kraft, Estate Planning Attorney
Paul Kraft is Co-Founder and the senior Principal of Frank & Kraft, one of the leading law firms in Indiana in the area of estate planning as well as business and tax planning.

Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
Paul A. Kraft, Estate Planning Attorney
Latest posts by Paul A. Kraft, Estate Planning Attorney (see all)
  • Challenging a Will in Indiana Based on Lack of Testamentary Capacity - September 21, 2023
  • The Spendthrift Beneficiary: Protecting Assets from Reckless Spending - September 19, 2023
  • How Do I File a Complaint Against a Nursing Home in Indiana? - September 14, 2023

Other Articles You May Find Useful

Benefits estate planning attorney
What Are the Benefits of Working with an Estate Planning Attorney?
Estate planning questions
What Are Some Good Estate Planning Questions to Ask Myself?
charitable gift annuity
What Is a Charitable Gift Annuity?
Estate litigation
How Might an Estate End Up in Litigation?
Dollarphotoclub
How Can I Incorporate Charitable Gifting into My Estate Plan?
after death
What Happens to My Estate after My Death?

Primary Sidebar

Frank & Kraft, Attorneys at Law

Follow Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube

Blog Subscription

Signup for our blog to receive our latest estate planning insights!

Where We Are

Frank & Kraft Attorneys at Law
135 N. Pennsylvania Street Suite 1100
Indianapolis, IN 46204-2485
Phone: (317) 684-1100
Fax: (317) 684-6111

See Larger MapGet directions

Office Hours

Monday8:00 AM - 5:00 PM
Tuesday8:00 AM - 5:00 PM
Wednesday8:00 AM - 5:00 PM
Thursday8:00 AM - 5:00 PM
Friday8:00 AM - 5:00 PM

Map

frankkraft_sidbr_map

Footer

  • Advantages of Working With Our Firm
  • About The American Academy
  • Disclaimer
  • Privacy Policy
  • Sitemap
  • Contact Us

Connect with Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube
footer-logo

Frank & Kraft Attorneys at Law
Attorney Advertisement

© 2023 American Academy of Estate Planning Attorneys, Inc.

© 2023 · American Academy of Estate Planning Attorneys, Inc. | Disclaimer | Privacy Policy | Sitemap | Contact Us