At Elder Law, P.A., we know selecting the right law firm to handle all of your estate planning needs can be difficult. The planning process is the best way to prepare your family for the future, and our legacy law firm works to help you leave a positive impact on every generation of your family. Most people don’t know the answer to the question of is there a gift tax in Florida. Helping you understand and plan for the gift tax is just one more way we can support your planning process.
What Is a Gift Tax?
Not quite sure what a gift tax is? The IRS has a fairly simple definition. If you give someone a gift – which could be money, property, or other valuable assets – and you don’t expect something in return – like repayment of those assets – you could, eventually, have to pay taxes on those gifts. Everyone has a particular amount they can give. In 2022, you could give up to $16,000 to each person per year without hitting your limit. Should you go over that amount, you’d have to report it to the IRS. Once reported, the IRS begins keeping track of how much you’ve given and applies it to the lifetime gift and estate tax amount. You are exempted from paying a federal gift tax until you hit $12.06 million in lifetime giving.
Is There a Gift Tax in Florida?
The IRS, though, only controls federal tax codes, not those in Florida. While some states levy their own gift tax that adds to the federal tax, Florida is not one of them. You do have to pay a gift tax if you breach your lifetime gift and estate tax exemption limits to the IRS even if you live in Florida, but you will never have to pay a gift tax to the state of Florida itself, no matter how much you give.
Does Everything Count as a Gift?
Not everything counts as a gift in the eyes of the federal government. For example, you have the ability to give your spouse as much as you’d like (tax-free) as long as your spouse is a citizen of the United States. You can also donate any amount you’d like to a charity without gift taxes. The charity does have to be a registered nonprofit organization, but for the most part, you won’t have to worry about gift taxes if you’re donating to a good cause. Medical expenses are also nontaxable – even medical expenses to others. The same is true for educational expenses. The funds, however, must be sent directly to the school instead of to the individual. If you’d like to cover someone’s education, you could also build them a 529 plan without adding to your lifetime gift limit. The IRS has said you can contribute up to $80,000 to any single 529 plan without adding to your limits.
How Can Elder Law Help?
Is there a gift tax in Florida? Not at the state level. At Elder Law, we work with individuals like you who are working to avoid a gift tax. If you have a fairly large estate, planning for those gifts is absolutely key, even in Florida where gift and estate taxes don’t exist. If you’re ready to learn more about our legacy law services and the best ways to avoid gift taxes as you plan your estate, we’re here to help. Contact us today.