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Will I Have to Fill Out a Gift Tax Form If I Pay My Child's Bills?
If we pay our child's bills, is that the same thing as gifting her $14,000 [the current annual gift tax exclusion]? Do we have to fill out a form 709? What if only one parent paid the bills and it's more than $14,000? Can we claim that each of us gave her the money and, therefore, be within the law if it's more than $14,000 total?
It depends on the type of bill. Payments for medical, dental, and tuition are not subject to federal gift tax laws. But if you are paying other bills, you will be subject to the laws. This means that if you give away $14,000 or less to any one individual, you do not have to report the gift or gifts to the IRS. If you are married and file jointly, then you can give a total of $28,000. If you give away more than $14,000 to any one person, however, you will have to file a Form 709, the gift tax return. But just because you file a Form 709 doesn't mean you necessarily have to pay taxes. The IRS allows you to give away a total of $5.43 million during your lifetime before a gift tax is owed (this is the threshold as of 2015). For more information on gift taxes, click here.