It's the most wonderful time of the year...for giving (and receiving) gifts! But if you're wondering whether or not your holiday generosity will be taxed by the IRS, we've got some good news and some bad news. Here's what you need to know about taxes and Christmas gifts for 2022.
The Good News: The Tax-Free Amount Has Doubled!
For 2022, the IRS has doubled the tax-free amount you can give to any one person. That means that you can give up to $14,000 to each person on your gift list without having to worry about Uncle Sam coming after you for a piece of the action. So if you've got a lot of people on your list, or if you've got someone who's really special that you want to give an extra-generous gift to, you're in luck!
The Bad News: There's Still a Limit
Even though the tax-free amount has doubled, there is still a limit to how much you can give before the IRS starts collecting taxes on your gifts. The new limit is $28,000 per person, per year. So if you give more than $28,000 to any one person in a single year, you'll have to pay taxes on the amount over $28,000.
The Bottom Line
Giving (and receiving) gifts is one of the best parts of Christmas, but it's important to be aware of the tax implications of your holiday generosity. As long as you stay under the $28,000 limit per person per year, you shouldn't have anything to worry about come tax time. Merry Christmas—and happy gift-giving!
