Do you need to file a gift tax return this year? “Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return,” is due April 15. Gift tax returns are filed separately from income tax returns, though you can request a six-month extension of time to file both on the same form.
The general filing requirement for Form 709 is based on the amount of gifts, such as money or property, that you make during a calendar year. You’ll typically have to file a gift tax return by April 15, 2015, if you gave someone more than $14,000 during 2014.
Keep in mind that exceptions to the general rule exist. For example, you’ll need to file a tax return if you chose to “split” gifts with your spouse, no matter the amount of the gift. Gift splitting means you and your spouse consent to treating a gift as if each of you made one-half of the gift. This allows you to give up to $28,000 to a single donee annually without owing gift tax.
Remember, too, that some gifts are not counted for purposes of filing gift tax returns. Payments you make directly to a school to pay for someone’s tuition fit into this category.
One more thing to know: Having to file Form 709 doesn’t necessarily mean you’re required to pay gift tax.
Not sure whether you need to file a gift tax return this year? Please give us a call. We’ll be happy to help you deal with the rules.