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Annual gift tax exclusion increases in 2013

11-18-2012 - On January 1, 2013, the amount you can give tax-free to any one individual in any one year without impacting your lifetime exemption increases from $13,000 to $14,000.  You may give up to $14,000 to as many individuals as you wish, tax-free. For married couples, that amount may be doubled. Most people choose to make cash gifts, or assets that are likely to appreciate in the future. 

Bear in mind that you are not limited to $14,000 if you pay for an individual's education or health care expenses. However, you must pay the educational institution or medical provider directly. 

The annual gift tax exclusion is different from the lifetime estate tax exemption. The lifetime estate tax exemption is currently $5.12 million but is scheduled to decrease to $1 million next year if Congress does not act. For information on the status of the estate tax, see the status report on federal estate tax legislation.

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