3 Gift Tax Planning Tips To Maximize Income

In order to prepare for your income taxes, good gift tax planning will help you maximize your income. A gift tax is anything that you give as a gift that has a monetary value attached to it. Your gift qualifies as a gift if you transferred ownership or property, or money without any type of compensation.

Luckily, there are ways to plan for these gift taxes so that you can maximize your income and minimize the amount of tax that is paid out.

1. Give Less than $12,000

Try to keep your individual gifts down to below $12,000 per person. Giving over this amount to any one person will require you to pay the tax while filing. This amount is increased to $24,00 in the event the gift is given to a married couple.

2. Maximize Any Charitable Giving

A gift tax is not applied to any monetary, or property, gifts to charity organizations. Maximize this giving according to the percentages of your adjusted gross income of 50%, 30%, and 20%.

3. Arrange Marital Trust

Arrange a marital trust for your spouse if you want to make sure they receive a lifetime income that is interest, and tax free. After your spouse dies then the remainder will be allocated to whoever you designate in the trust document.