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Add more tax cheer to holiday gifts

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in Small Business Tax,Small Business Tax Deduction Strategies

Q. I gave each of my adult children $10,000 before the holidays. Can I increase these amounts without paying gift tax? C.G., New Britain, Conn.

A. Yes. If it’s still 2012 when you’re reading this, you can give each child another $3,000 and still qualify for the maximum $13,000 annual gift tax exclusion. Even if you miss adding to your gifts for 2012, you can still take advantage of the gift tax exclusion anytime for 2013. Even better, the exclusion for 2013 has been raised to $14,000 per recipient. And there’s no limit on the number of family members you can bestow gifts upon.

Tip: Excess gifts may be sheltered by the lifetime gift tax exemption (scheduled to be $1 million in 2013).

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