Hello,
I am married, and my wife and I file our taxes jointly every year. This year, we contributed $20,000 to my son's 529 plan. After doing so, I read about the gift tax. I understand that the gift tax limit in 2024 is $18,000. If you are married, you can combine the limits and have a total of $36,000.
My question is: Do I need to do anything special on my tax return since we contributed more than $18,000? My wife and I share a joint bank account from which the money was withdrawn.
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Q. Do I need to do anything special on my tax return since we contributed more than $18,000?
A. No.
Nothing about a gift is reported on your regular income tax return (form 1040). There is a special form for gift tax reporting, but you are under the $36K, so you do not need to file form 709. Furthermore there is something called super funding for 529 plans that allows you to contribute up to 5 years worth of contributions, in one year, and still not have to file a gift tax return.
Super funding https://www.savingforcollege.com/article/10-rules-for-superfunding-a-529-plan
"Gift Tax" is somewhat of a misnomer. Even though a gift tax return may be required, very few people ever actually pay federal gift tax. The purpose of the gift tax return is usually only to document a reduction in the allowable estate tax exemption.
See https://turbotax.intuit.com/tax-tools/tax-tips/Tax-Planning-and-Checklists/The-Gift-Tax-Made-Simple/...
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From a joint account the gift is considered to be made 1/2 from each of you so you don't need to do anything.
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