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
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.""
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.""