gifting money thru PayPal

[bain2486]

Good morning,

I support my girlfriend all year, I've been doing that since 2018. This year I have sent her over $8000 thru PayPal and will probably send her $14000 total. What tax ramifications could I, or her, be looking at? I know that amount of money is unusual and I'm afraid the IRS will think she is running a business. Even though it's legitimate gifting.

Thank you

[EricE_CPA · Accepted solution]

Hi Bain2486,

If the amount you give (in total) is below the Gift Tax Exclusion amount for that year,  then you won't incur any gift taxes.

Per IRS:

Frequently Asked Questions on Gift Taxes 

"The annual exclusion applies to gifts to each donee. In other words, if you give each of your children $11,000 in 2002-2005, $12,000 in 2006-2008, $13,000 in 2009-2012 and $14,000 on or after January 1, 2013, the annual exclusion applies to each gift. The annual exclusion for 2014, 2015, 2016 and 2017 is $14,000. For 2018, 2019, 2020 and 2021, the annual exclusion is $15,000. For 2022, the annual exclusion is $16,000.""