Annual Gift Tax Exclusion

A gift tax is a federal tax applied to a person giving anything of value to another person.

Gifts made each year at or below the annual exclusion are not taxable gifts. The annual exclusion for 2020 is $15,000; therefore, a person can give $15,000 each year to as many persons as they choose. The gifts are not taxable and do not have to be reported on a gift tax return.