Giving with Form 709, the Federal Gift Tax

During 2014, did you give members of your family – say grandchildren – gifts of cash to help them deal with expenses? If you did, and the total quantity of those gifts exceeds $14,000 within the same calendar year, you’ll need to file IRS Form 709. In addition, you’ll need to file the form if you are a U.S. citizen and made gifts which exceeded $145,000 to a spouse who is not a U.S. citizen.

IRS Form 709 is due on or before April 15 of the year following the year that you made your gifts. So, for gifts made in 2014, IRS Form 709 is due on or before April 15, 2015. Somewhat ironically, federal gift tax is actually required of the giver, whereas the recipient of the gift does not incur any income tax or gift tax consequences.

In addition to restricting your cash gifts, one other way of avoiding the federal gift tax is by ‘splitting’ the gift with a spouse – essentially dividing the tax responsibility so that neither individual’s gift exceeds $14,000.

As mentioned in our post on Extensions on Individual Tax filing, IRS Form 4868 entitles you to an automatic six-month extension. If you file Form 4868 and expect to owe Gift or Generation-Skipping Transfer Tax (Form 706), you can pay the gift and/or GST tax using Form 8892-V. Get started filling out Form 709 today and check out all of our tax forms and this season’s tips and tricks for filling them out.  You’ll see what makes PDFfiller the gift that keeps on giving!