In 2025, you can give your son and daughter-in-law each $19,000 without incurring taxes or surpassing the $13.99 million lifetime limit. Gift tax rates start at 18% and go up to 40%, with the giver responsible for paying the tax. Consult a financial advisor to understand gift tax rules and limits.

The gift tax is a federal tax imposed when giving property or money without receiving something of equal value in return. The IRS sets limits on annual and lifetime gifts, with taxes only due if the lifetime limit is exceeded. Charitable donations, political contributions, and gifts to spouses or dependents are tax-free.

For 2025, the annual gift limit is $19,000 per person, with no limit on the number of recipients. Exceeding this limit requires filing IRS Form 709, but no tax is due until the $13,990,000 lifetime limit is surpassed. Gifts like medical expenses, tuition payments, and certain contributions are tax-free and don’t count against the lifetime limit.

To avoid gift taxes, consider a gift-splitting strategy with your spouse or utilizing special rules for contributions to qualified tuition plans. Plan larger gifts before the lifetime limit decreases in 2026 to prevent tax consequences. Most people won’t owe gift taxes, but generous gifts exceeding the annual limit to one person may require filing Form 709.

Consult a financial advisor to understand how gift tax laws impact your situation. SmartAsset’s free tool matches you with local advisors for guidance. Keep an emergency fund for unexpected expenses and consider high-interest savings accounts for growth. Photo credits: iStock.com.

Read more at Yahoo Finance: How Much Can I Gift My Son and Daughter-in-Law Without Triggering IRS Taxes?