You’ve done well in life, and now you want to share some of your wealth with the people you know and love. Perhaps you want to help your children make a down payment on a home. Or contribute to your grandchild’s college savings plan. Or give a retirement gift to a loyal household employee.
But one concern that might be holding back your generosity is the question of whether you’ll have to pay the federal gift tax. It’s a topic that comes up in all kinds of discussions of giving. But here’s the good news: In general, the only people who have to worry about it are the so-called “one percenters.”
Still, even if you probably will never have to pay gift taxes, it’s worth getting the answer to common questions about this widely misunderstood IRS provision.