Cash Gift made to Son and his family

[Kenn1atmos]

To help my son and his family deal with medical equipment and expenses associated with their son(my grandson), I pulled about $75k from one of my IRAs. I had federal tax taken at time of withdrawal. This was a cash gift that I do not want to affect my average income calculations going forward or adversely affect tax revenue. What documentation will I need?

[RobertB4444]

Unfortunately this will cause a bump in taxes for you for this year and could adversely effect your tax calculations if you are receiving social security or something that takes your average annual income into account.

Gifts are not taxable to those who receive them.  Only to those who give them.  

You will have to pay taxes on the $75K that you pulled out.  I don't know whether it is an early distribution for you or not but if it is then medical expenses is a valid reason for an early distribution.  

You should file a gift tax return to show the amount that you gave to your son so that he has an explanation of where the money came from.  Here is more information on the gift tax.

@Kenn1atmos 

[xmasbaby0]

You had tax withheld from the distributions from the retirement account, just like when an employer withheld tax from your paychecks.  When you enter it all into the software, the calculations are done to reconcile the amount of income you received and the amount of tax that was withheld.  You might owe more or you might get a refund.

Gifts given to family members, friends or other individuals are not deductible.   Gifts received are not taxable to the person who received the gift, and are not entered on a tax return.

If your gift exceeds the yearly limit ($18,000 per individual)  imposed by the gift tax rules, then you will need to complete a Form 709 gift tax form and send it to the IRS, although it is very unlikely that you will owe any tax.

TurboTax does not support Form 709.  It is not an income tax form and would not be included as part of an income tax return.

Here is a link to the form:

https://www.irs.gov/pub/irs-pdf/f709.pdf

https://turbotax.intuit.com/tax-tips/estates/the-gift-tax-made-simple/L5tGWVC8N