How Much Can You Give in 2025 Without Paying Gift Tax?

Are you considering giving a financial gift of cash or property this year? Knowing the IRS gift tax rules can help you save time and money, while potentially sparing you from filing gift tax returns.

What is the gift tax?

According to the IRS, gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether or not the donor intends the transfer to be a gift.

A gift is when you give money, property, or its income or use to someone without getting equal value in return. Selling something for less than its worth or offering a loan with little or no interest may also count as a gift. The federal gift tax — ranging from 18% to 40% — applies when you transfer something of value without full compensation.

The gift giver is usually responsible for any tax owed. However, the estate bears the responsibility if the giver dies before the tax is settled. However, there are some circumstances where the recipient could be responsible.

For IRS purposes, gifts are valued at their fair market value at the time of the transfer. In addition to cash gifts, the gift tax includes:

• Real estate
• Vehicles
• Stock transfers
• Forgiven debts
• Life insurance proceeds
• Other assets of value

How much can you give tax-free in 2025?

Each year, the IRS adjusts the annual gift tax exclusion for inflation. In 2025, that exclusion increases to $19,000 per recipient, up from $18,000 in 2024. You can gift this amount to as many recipients as you like with no impact on your lifetime estate and gift tax exemption. If you’re married, your spouse can gift the same amount. In 2025:

• You can give up to $19,000 per person without having to report it to the IRS.
• Married couples can combine their exclusions to give up to $38,000 per recipient tax-free.

For example, a married couple can give $38,000 to each of their two children, their spouses, and two grandchildren — totaling $228,000 tax-free.

Gifts made to spouses, charitable organizations, political groups, educational institutions (for tuition), and medical care providers may be exempt from gift tax. For larger gifts or complex situations, speak with a tax advisor to ensure you’re following current IRS guidelines.

These limits apply per calendar year. Gifts should be given by December 31, 2025, to count for the 2025 tax year.

What about the lifetime gift and estate tax exemption?

 In addition to the annual exclusion, the IRS allows a lifetime exemption for larger gifts. For 2025, that exemption increases to $13.99 million per individual, or $27.98 million per married couple.

Most people don’t owe federal gift tax because of the high lifetime limit. If you give more than the yearly limit, you report it on IRS Form 709. However, actual gift tax payment only occurs if the total exceeds the lifetime limit. For answers to frequently asked questions, visit the IRS website.

Are more changes coming in 2026?

In 2026, the lifetime estate and gift tax exemption is scheduled to be reduced by half due to Tax Cuts and Jobs Act (TCJA) expirations. With estimates suggesting a reduction of close to $7 million or less, 2025 is a critical year for strategic giving, particularly for high-net-worth individuals.

Unless Congress takes action, the expanded lifetime gift and estate tax exemption is set to expire at the end of 2025. If it does, the threshold could be cut roughly in half. For high-net-worth families, this could mean a significant increase in estate tax exposure — up to 40% on gifts above the reduced limit.

The 2025 increase in the gift tax exclusion offers a valuable opportunity to pass wealth to loved ones without tax consequences. Whether you’re considering major gifts or long-term estate planning, consulting a tax professional can help you make the most of these IRS limits. For more information, talk with your wealth advisor. If you’re not a client and would like more information, let’s talk.

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