Gifts That Are Not Taxable
Because the annual exclusion is available for as many persons as you would like to give to, you can reduce your taxable base substantially by making annual gifts at an amount less than the annual exclusion to each person. Making annual gifts is a core building block in many estate plans. You may want to include this in your estate plan as well, especially if you suspect that your taxable base will exceed the savings account amount.
It is important to understand that the gift tax exclusion is a per-person exclusion. If you have four children and six grandchildren, you could give $130,000 per year, or $13,000 to each person, without making a taxable gift that would affect your savings account.
You and your spouse can each give $13,000 per person to an unlimited number of people without making a taxable gift. Jointly, you and your spouse can give $26,000 to as many individuals as you wish. This exclusion will rise in increments of $1,000 depending on inflation. In future years you may be able to make even larger annual gifts.
