Everyday Law & Life

How Much Money Can You Give Your Child Without Paying Taxes in the U.S.? If you’re planning to give your child a large sum of money — for college, a house, or just a head start in life — you might be wondering: Will the IRS tax it? Let’s break down how gift taxes work in the U.S. and what you need to know to give wisely. 🎁 What Is the Gift Tax? The gift tax is a federal tax applied when one person gives money or property to another without receiving anything in return . But don’t panic — there are generous exemptions , and most people never end up paying this tax. ✅ Annual Gift Tax Exclusion (2024) You can give up to $18,000 per year per person without any tax or reporting . Married couples can combine their exclusions → $36,000 per child per year Applies to cash, checks, stocks, property, or other assets 📝 No IRS Form 709 required if you're under the limit. 💼 What If You Exceed the Limit? You don’t pay tax right away. Instead: You file IRS Form...

Do You Have to Pay Taxes on an Inheritance in the U.S.? Inheriting money or property from a loved one can be both emotional and confusing — especially when it comes to taxes. Many Americans wonder: Do I have to pay taxes on what I inherit? Here’s a clear and simple breakdown of how inheritance taxes work in the U.S., and what you need to know to stay compliant and avoid unexpected bills. ✅ Is Inheritance Taxed in the U.S.? It depends. At the federal level, there is no inheritance tax . However, that doesn’t mean you’re off the hook entirely. Some states do impose inheritance taxes, and large estates may still trigger estate taxes . 🏛 Federal Taxes vs. State Taxes Tax Type Applies to Who Pays? Estate Tax Estates over $13.61 million (as of 2024) The estate (not the heir) Inheritance Tax Only in 6 states The heir (you) States with inheritance tax: Iowa (phasing out by 2025) Kentucky Maryland (only for non-lineal heirs) Nebraska New Jersey...