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Submitted By: someone
Answered: December 21, 2021 11:52 pm
Answered: December 21, 2021 11:52 pm
If I gift money to my grandchildren, is there a tax deduction I can take?
Unlike deductions for charitable contributions to IRS-recognized organizations, there is no income tax deduction for gifts you make to individuals. What’s more, if gifts of cash exceed the annual gift tax exclusion—$15,000 in 2021; $16,000 in 2022—you must file Form 709, but in most cases no gift tax will be owed because of the lifetime exclusion.
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Tax Glossary
Exemption
A fixed deduction allowed to every taxpayer, except those who may be claimed as a dependent by another person. Extra exemption deductions are allowed for a spouse on a joint return and for each qualifying dependent. A deduction of $3,400 is allowed for each exemption claimed on 2007 returns, but the deduction is phased out for certain high income individuals.
