Welcome to the Tax Insights Podcast, where we break down complex tax topics into bite-sized how-tos. In this episode, Jeff Dvorachek discusses the tax implications of GoFundMe gifts. These gifts are considered individual-to-individual with no tax benefits. Jeff highlights the 2024 annual gift limit of $18,000 and explains that recipients don’t need to report these gifts as income. Let’s dive in!
On today’s episode of Tax Insights, Jeff explores the tax implications of GoFundMe gifts. He explains that these are considered individual-to-individual gifts without tax benefits. Jeff covers key points like the annual gift limit, which can impact your lifetime exemption if exceeded, and clarifies that recipients do not need to report these funds as income. Tune in for a clear overview of how GoFundMe gifts may affect your taxes.
Host: Jeff, today we’re diving into a topic that I think a lot of people are curious about—gifts made through GoFundMe pages. Many people are familiar with GoFundMe, but we’re focusing on the implications of giving gifts through these platforms.
Jeff: Absolutely. When it comes to giving through GoFundMe, it’s important to note that we’re talking about individual-to-individual gifts, not charitable donations. So, there are no specific tax benefits or deductions like you would get with contributions to a charity or a 501(c)(3) organization. Essentially, it’s a straightforward gift from one person to another.
Host: Interesting. We’ve discussed before that there’s a maximum amount you can gift before it triggers tax implications. Is that still the case with GoFundMe gifts?
Jeff: Yes, it is. For 2024, you can gift up to $18,000 to an individual without any paperwork or tax consequences. If you give more than that amount, you need to file a gift tax return. This return essentially informs the IRS that you’ve given a larger gift and that it’s counted against your lifetime gift exemption, which is currently $13.6 million.
Host: That $13.6 million lifetime exemption is quite a hefty sum. It does make you wonder about the $600 increment in the annual gift limit.
Jeff: It’s an odd number, isn’t it? But it’s based on inflation adjustments. Next year, the figure might change slightly to reflect that.
Host: Most people probably won’t hit the $13.6 million lifetime exemption, but it’s good to know the $18,000 annual limit for gift reporting. Moving on, what about the recipients of these GoFundMe gifts? Do they need to report these funds as income?
Jeff: No, they don’t. The recipient of a gift has no reporting requirements. The responsibility falls on the giver if they exceed the annual gift limit.
Host: Great to know! Jeff, how can our listeners get in touch with you and your team at Hawkins Ash?
Jeff: They can visit our website at HawkinsAsh.CPA and check out the CPA-HQ section. We have a team of 180 professionals across 10 offices, so there’s plenty of expertise available to assist with any questions or needs they might have.
