You can give $19,000 per recipient in 2026 with no gift tax and no return to file, and a married couple can split gifts for $38,000 each. Larger gifts tap a lifetime exclusion that OBBBA set at a permanent $15 million per person, indexed for inflation, though using it requires filing Form 709. Tuition and medical costs paid directly to the institution do not count against either limit.
How to Give Money Away Without Giving the IRS a Cut
By Paul D. Diaz, EA, MBA ·
🔊 Read it to me — listen to this article read aloud.
Yes, the government taxes gifts — if they're large enough and you handle them carelessly. Handle them deliberately and almost nobody actually pays gift tax. The rules give you three separate lanes, and generous ones.
Lane 1: The annual exclusion — $19,000 per person, per year
For 2026 you can give up to $19,000 to as many individuals as you like — children, grandchildren, the neighbor, anyone — with no gift tax, no return to file, nothing. A married couple can combine (or "split") gifts for $38,000 per recipient per year. Five kids and their spouses? That's $380,000 a year moving out of your estate with zero paperwork, as long as no single recipient crosses the line.
Lane 2: The lifetime exclusion — now a permanent $15 million
Gifts beyond the annual amount tap your lifetime exclusion, which the 2025 tax law (OBBBA) set at $15 million per person starting in 2026 — permanent, and indexed for inflation going forward. Two things to understand:
- Using it requires filing a gift tax return (Form 709), even though no tax is due. The return is how the IRS keeps score.
- The gift and estate exclusions are one bucket. Give your child $3 million today and your remaining shield against estate tax at death drops to $12 million. For most families that trade is fine — assets given away also move their future growth out of the estate — but it should be a decision, not an accident.
The years of "use it before Congress takes it away" scrambling are over for now; permanence changed the planning posture from urgent to strategic.
Lane 3: Tuition and medical — unlimited, if paid directly
Payments made directly to an educational institution for tuition (college or private primary school — not books or room and board) or directly to a medical provider for someone's care don't count against either exclusion at all. The word "directly" is doing all the work: write the check to the school or the hospital, never to the person.
One trap: gifting property
Gift appreciated property and the recipient takes your original cost basis — meaning they inherit your built-in capital gain. Property that passes at death, by contrast, generally gets a stepped-up basis. Sometimes the tax-smart move is to hold the appreciated asset and gift cash instead. This is exactly the kind of decision worth pricing out before you sign anything.
Planning gifts to family — or already made one that needs a Form 709? Attach the details with the paperclip in the chat, and we'll scope and quote the work in writing after intake. The free sample chapter of my Guide is at /book.
A married couple can gift $38,000 per year to each child, grandchild, or other recipient—$38,000 that leaves their estate permanently, with no paperwork and no exemption erosion.
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