I would like to send money abroad to my parents. Upto what limit I don't have to report to IRS? How much tax I have to pay if I cross the limit?

[DoninGA]

You can gift up to $14,000 a year to a single individual without having to report the gift to the IRS using Form 709.  There are no taxes owed on the gifts if the total gifts given in your lifetime have not exceeded $5.49 million.

[sagarpatel222]

Thank you DominGA. Do I have to pay taxes if I cross $14,000 in a single year?

[DoninGA]

No.  There are no taxes paid on the gift if it is more than $14,000 as long as your total gifts have not exceeded $5.49 million.  But the gift would need to be reported on a Form 709 if over $14,000

[sagarpatel222]

Does $14,000 counts towards both me and my wife? Or we both get the limit of $14,000 limit for each person? (We are filing married jointly by the way)

[DoninGA]

It is per person as the giver of the gift.  So you could give $14,000 to each of your parents for a total of $28,000 and your wife could give to each of your parents for another $28,000.  So $56,000 could be given to your parents without either you or your wife having to file a Form 709.

[sagarpatel222]

Thank you very very much for your quick answers DominGA. I really appreciate that.
Not sure if I should open another thread for this or not.

But I have a Foreign account in India and I would like to send some money to invest in mutual funds in Indian market. If I transfer money from my local bank to the foreign bank and after few years I get the money back (with additional income) to my foreign account to local US Bank account, do you know what Tax implications that I will be having in that case while sending and receiving money?

[DoninGA]

That should be posted as a new question.  You may also run into reporting the foreign accounts (depending on the amounts) using FBAR and/or Form 8938.  See this IRS website - <a rel="nofollow" target="_blank" href="https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements">https://www.irs.gov/bu...>
Transfers between bank accounts are not reported by you to the IRS, although your US bank will report cash transactions to the IRS if $10,000 or more.  Then you have the issue of foreign investment gains or losses to attend to on your US federal tax return.

[mhnpdl]

 Transferred money to dad or brother will be a loan with no interest or gift but xoom or transferwise has field called loan/gift while transferring fund to them. Does that need to reported to IRS ?

[RobertG]

If the amount given to each individual is less than $14,000 each year, you don't have to file a gift tax return or report it to the IRS.  If you make large zero-interest loans to get around the gift tax you may have to report the imputed interest on the loan.  See IRS Tax Rules for Imputed Interest for further information.

The IRS website Frequently Asked Questions on Gift Taxes covers what you need to report to the IRS.

[TaxHead]

I thought the Taxpayer pays taxes on gifts received and not for gifts sent. You send gifts of money that is already taxed. So, I don't understand this thread or am I missing something? 

[xmasbaby0]

@TaxHead

GIFTS

Money that you receive as a gift is not taxable income to you, and you do not need to report it on your income tax return.  Money that you gave as a gift to someone else is not deductible for your taxes.

Turbo Tax does not support the gift tax form 709, but here is a link:

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

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

https://www.forbes.com/sites/ashleaebeling/2017/10/19/irs-announces-2018-estate-and-gift-tax-limits-...

[ABhandari9]

Hello,

When does the yearly limit reset? Is it every January? or does it take into account a 12 month moving average?

[VolvoGirl]

Calendar Year, so January 1 to December  31.

[Critter-3]

The limit is per person per year ... so the current max is $15K  and if you want to give them more make a gift in  2020 and another in January 2021.