I have a question about tax deductible gifts. I give my adult child money each month to support herself and her children. Are gifts to individuals considered tax deductible?
Gifts to individuals are not tax-deductible. Tax-deductible gifts only apply to contributions you make to qualified organizations.
Depending on how much money you are gifting to your adult child, you may have to pay a Federal Gift Tax. The Federal Gift Tax applies to gifts in excess of $14,000 per year, per recipient of the gift. Therefore you may gift your child under $14,000 per year without having to pay tax on the gift. Typically, the child or person receiving the gift does not have to a pay a tax on the gifted amount.
Additionally, you may gift up to $14,000 per year to multiple individuals without being subject to the Federal Gift Tax. If you are married, you and your partner may gift an individual up to $28,000 per year. Again, you and your husband are not limited to the number of people you may gift to in a given year.
For example, if you have one child you, as an individual, may gift that child up to $14,000 per year or as a married couple you may gift your child $28,000 per year. If you have more than one child you may gift each child up to $14,000 per year or you and your partner may jointly gift up to $28,000 per year per child.
Learn more about the Federal Gift Tax by visiting: https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes#2/p>
Learn more about Charitable Contributions, by visiting Publication 526: Charitable Contributions at www.irs.gov.
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For individual taxpayers, Schedule A is used in conjunction with Form 1040 to report itemized deductions. If you choose to claim itemized deductions instead of the standard deduction, you would use Schedule A to list your deductions. Your itemized total is then subtracted from your taxable income.
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