Get your Gift Tax Returns filed early

In addition to filing your 1040, many taxpayers will have to file Gift Tax returns Form (709) for the 2015 tax year.

Per the IRS, the requirements to file a Gift Tax return are as follows:

1)      You gave gifts to someone (other than your spouse) in 2015 totaling more than $14,000.  

Exceptions to this rule are as follows:

a.       Transfers to political organizations

b.      Payments made directly to a qualifying educational institution on behalf of someone else.

c.       Payments for medical care for an individual which are paid directly to a Doctor or medical institution.

2)      You gave a gift of a future interest of any amount. Example: A person may donate his home to charity but the charity does not get to take ownership until after the person dies.

3)      Any gift that is being split with a spouse such as community property. Note: You cannot file a joint Gift Tax return. Each spouse must file his or her own tax return.

For most accountants, tax season begins in early-to-mid February. The IRS has declared that they will begin accepting e-filed returns on January 19^th. The due date to send out most 1099s and W2s is February 1^st. That means most people won’t be heading to their accountants until at-least mid-February. However, if you are required to file a Gift Tax return, you can start much earlier.

Most people don’t need to wait for any government documents to determine what gifts they made in the prior tax year. Therefore, a taxpayer can file his/her own Gift Tax return as early as

January 2^nd. Since Gift Tax returns can only be paper filed (not e-filed), the IRS January 19^th start date foe e-filing does not apply. Most likely your accountant will not be busy during the first two weeks of January. That is the perfect time to get your list of gifts to your accountant for preparation of your Gift Tax return so you don’t get stuck in the crunch-time of tax season.