Q:

Can you deduct gifts on your income tax return?

A:

Quick Answer

Taxpayers cannot deduct gifts they make on their income tax returns except for charitable contributions, according to the Internal Revenue Service. Making gifts does not usually affect federal tax returns. The annual exclusion amount is $14,000 for tax year 2015, unchanged from 2014.

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Full Answer

Taxpayers do not have to file gift tax returns unless they give property or money valued more than the annual exclusion to someone who is not their spouse. The gift recipient does not have to pay any federal gift tax and does not have to pay income tax on the gift's value, explains the IRS. Other gifts that are not taxable include medical expenses or tuition the taxpayer pays directly to an educational or medical institution for someone and gifts to political organizations, as of 2015.

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