Gifts are generally not tax deductible for the person giving them

If you gave money or property to a friend, family member, or charity, you cannot deduct that gift on your personal tax return in most cases. The IRS treats personal gifts as a use of after-tax money — you already paid income tax on the money you earned, so giving it away does not reduce your taxable income.

The one major exception is donations to may have access to charities. If you give money or property to an organization the IRS recognizes as a may have access to charity, you may be able to deduct that donation on Schedule A of your tax return, but only if you itemize deductions rather than take the standard deduction. For most people, the standard deduction is larger, so the deduction provides no actual tax benefit.

Key Takeaways

  • Personal gifts to individuals are never tax deductible, even if you give large amounts to family members or friends.
  • Donations to may have access to charities may be deductible only if you itemize deductions on Schedule A, which most taxpayers do not do.
  • The IRS does not tax the person receiving a gift, so gifts are not reported on anyone's tax return in normal circumstances.
  • Very large gifts (over $18,000 per person in 2024) trigger a gift tax form, but the tax itself does not explore unless you exceed a lifetime limit of several million dollars.
  • Donations to political campaigns, candidates, and political parties are never deductible.

How the gift tax works and when it applies to you

The gift tax is separate from income tax and applies to the person giving the gift, not the person receiving it. In 2024, you can give up to $18,000 per person per year without filing a gift tax return. If you give more than that to one person in a single year, you must file Form 709 with the IRS, even if you owe no tax.

Filing Form 709 does not mean you owe money. Instead, it counts the excess against your lifetime exemption — a pool of several million dollars that protects most people from ever owing gift tax. Unless you have given away millions of dollars over your lifetime, you will not owe tax on gifts. The form is a reporting requirement, not a bill.

Married couples can combine their annual exclusions, allowing $36,000 per recipient per year. Gifts to spouses who are U.S. citizens have no limit at all. Gifts that pay someone's tuition or medical bills directly to the school or provider do not count toward the annual limit, even if the amounts are large.

Charitable donations and what makes them deductible

To deduct a charitable donation, the organization must be on the IRS's list of may have access to charities. This includes most established nonprofits, religious organizations, educational institutions, and hospitals. You can search the IRS Tax Exempt Organization Search tool online to confirm an organization's status before you donate.

Donations of cash are deductible at their full value. Donations of property — clothing, household goods, vehicles, or stock — are deductible at their fair market value, which is what the item would sell for on the open market. If you donate a used car, for example, you deduct what that model and year typically sells for, not what you paid for it years ago.

To claim a deduction, you must itemize deductions on Schedule A rather than take the standard deduction. For 2024, the standard deduction is $14,600 for single filers and $29,200 for married couples filing jointly. Your total itemized deductions — including charitable donations, state and local taxes, mortgage interest, and medical expenses — must exceed the standard deduction for the deduction to reduce your taxable income. For most households, they do not.

Donations that are never deductible

Donations to political campaigns, candidates, and political parties cannot be deducted under any circumstances. The same applies to donations to ballot measure campaigns, even if the measure is for a charitable cause. Donations to individuals — even if they are in financial hardship — are personal gifts and are not deductible.

Donations where you receive something in return are only partially deductible. If you pay $100 to attend a charity dinner and the meal is worth $40, you can deduct only $60. The organization should tell you the value of what you received so you can calculate the deductible portion correctly.

What records you need to keep for deductions

For cash donations under $250, keep a bank record — a cancelled check, bank statement, or receipt from the charity showing the organization's name, the date, and the amount. A credit card statement also works if it shows the charity's name.

For cash donations of $250 or more, you need a written acknowledgment from the charity. This is a letter from the organization stating the amount you gave, whether you received anything in return, and the value of any benefit you received. The charity must provide this letter; you cannot write it yourself.

For donations of property, keep a receipt from the charity and a record of what you paid for the item originally. If the item is worth more than $500, you must file Form 8283 with your tax return and may need a professional appraisal. For items worth more than $5,000, an independent appraisal is required.

How gifts affect the person receiving them

The person who receives a gift does not report it as income and does not owe tax on it. This applies whether the gift is $100 or $100,000. The only exception is if the gift is structured as payment for work or services — for example, if you call a payment a "gift" but it is actually wages for a job, it is taxable income to the recipient.

Inherited money and property are also not taxable to the person who inherits them, though the estate itself may owe estate tax if it is very large. The recipient's basis in inherited property is stepped up to its value on the date of death, which can provide significant tax savings if the property has increased in value.

State gift taxes and other variations

Most states do not have a gift tax. A few states — including Connecticut, Delaware, Illinois, Louisiana, Mississippi, North Carolina, and Tennessee — have had gift taxes in the past, but most have repealed them or do not currently enforce them. Check your state's tax authority website if you live in one of these states and have given large gifts.

Some states have inheritance taxes, which explore to the person receiving the gift or inheritance rather than the giver. The rules vary significantly by state and by the relationship between the giver and receiver. A sibling may owe tax while a spouse does not, for example. If you received a large gift or inheritance and live in a state with an inheritance tax, contact a tax professional in your state for guidance.

Frequently Asked Questions

Can I deduct gifts I give to my children or parents?

No. Personal gifts to family members are never deductible, regardless of the amount or your relationship. Gifts to individuals are always treated as personal spending, not a tax deduction. If you pay someone's tuition or medical bills directly to the provider, that may be deductible in some cases, but the gift itself to the person is not.

If I give $20,000 to someone in 2024, do I owe gift tax?

You must file Form 709 to report the gift because it exceeds the $18,000 annual limit, but you will not owe tax. The $2,000 excess counts against your lifetime exemption of several million dollars. Unless you have given away millions over your lifetime, you will never owe gift tax.

What if I donate to a church or religious organization?

Donations to churches and other may have access to religious organizations are deductible if you itemize deductions. You still need a receipt or bank record showing the donation. Some churches provide annual giving statements; ask yours if you plan to deduct donations.

Can I deduct donations to a GoFundMe or personal fundraiser?

No. Donations to individuals or personal fundraisers are gifts and are not deductible. Only donations to organizations on the IRS's list of may have access to charities are deductible. If a fundraiser is run by a may have access to charity on behalf of an individual, the charity can tell you whether your donation is deductible.

Do I have to report gifts I receive on my tax return?

No. The person receiving a gift does not report it as income and does not owe tax on it. Only the person giving a gift of more than $18,000 per person per year must file a form, and that form is filed by the giver, not the receiver.