April 18, 2022, is the deadline for filing your federal income tax return. However, keep in mind that the 2021gifttax return deadline is on the very same date. For example, suppose you made significant gifts to family members or heirs last year. In that case, it’s essential to determine if you must file Form 709.

What are the tax filing requirements for gifts?

Generally, you must file a gift tax return for 2021. That is if you made gifts during the tax year that exceeded the $15,000-per-recipient annual gift tax exclusion (other than to your U.S. citizen spouse). For 2022, the exclusion amount has increased to $16,000 per recipient or $32,000 if you split gifts with your spouse.

You also need to file if you made gifts to a Section 529 college savings plan and wish to accelerate up to five years’ worth of annual exclusions ($75,000) into 2021. Other reasons to file include making gifts:

• That exceeded the $159,000 (for 2021) annual exclusion for gifts to a noncitizen spouse
• Of future interests (such as remainder interests in a trust) regardless of the amount
• Of jointly held or community property

Keep in mind that you’ll owe gift tax only to the extent an exclusion doesn’t apply, and you’ve used up your federal gift and estate tax exemption ($11.7 million for 2021). However, as you can see, some transfers require a return even if you don’t owe tax.

What if no gift tax return is required?

A gift tax return is not required if your gifts for the year consist solely of gifts that are:

• Tax-free because they qualify as annual exclusion gifts
• Present interest gifts to a U.S. citizen spouse
• Educational or medical expenses paid directly to a school or healthcare provider
• Political or charitable contributions

But if you transferred hard-to-value property, such as artwork or interests in a family-owned business, you should still consider filing a gift tax return. Adequate transfer disclosure in a return triggers the statute of limitations, generally preventing the IRS from challenging your valuation more than three years after you file.

Make the 2021 gift tax return deadline

If you’re unsure whether you need to file a gift tax return or if you owe gift tax to the IRS, we can help. Act quickly, though, because the filing deadline is quickly approaching.

Contact our RRBB accountants and advisors today.

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