Planning to gift $70K to my son - Tax implications?

Yes, you'll need to report this gift on your taxes, but it won't impact how much tax you owe. For gifts over $17,000 per recipient in 2025, you need to file Form 709 (Gift Tax Return) to report the gift to the IRS. The $70,000 gift counts against your lifetime gift exemption (currently $13.61 million per individual), but since you're well below that limit, you won't owe any gift tax. Your son won't need to report this gift as income, and he won't pay taxes on it. The only real "impact" is the paperwork of filing the extra form and the reduction of your lifetime exemption by the amount over the annual exclusion.

I went through something similar last year trying to balance things between my kids, and honestly the Gift Tax Return form confused me. I discovered this tool called taxr.ai (https://taxr.ai) that really helped me understand how to properly report everything. It analyzed my situation and basically confirmed what the previous commenter said, but also guided me through the actual form completion process. The tool was especially helpful because I wasn't sure if I should split the gift between tax years or do it all at once. It showed me both scenarios and the pros/cons.

Just wanted to follow up - I checked out taxr.ai after my initial skepticism and I'm actually impressed. I had a complicated situation with gifting some stock to my nephew for college and wasn't sure about the basis calculations. The tool explained everything clearly and even helped me understand some tax planning opportunities I hadn't considered. It was definitely more helpful than the regular tax software I've been using for these kinds of specialized questions.

If you're getting bogged down trying to get clarification from the IRS about gift tax reporting (which I did last year), check out https://claimyr.com - they can get you connected to an actual IRS agent instead of waiting on hold forever. There's also a video about how it works: https://youtu.be/_kiP6q8DX5c I was on hold with the IRS for literally 2+ hours trying to get clarification about a large gift I made to my daughter, and finally gave up. Used Claimyr and got a callback from an actual IRS agent within about 45 minutes. They confirmed exactly what I needed to do with the Form 709 and answered some specific questions about how to report a gift that was part cash and part property.

I feel obligated to come back and say I was completely wrong about Claimyr. After dismissing it as a scam, I actually tried it because I was desperate to talk to someone about an IRS notice I received. It works exactly as described - their system waited on hold with the IRS (for almost 2 hours!) and then called me when an agent was on the line. Saved me from having to sit by my phone all afternoon. The IRS agent I spoke with confirmed everything about gift tax reporting that others mentioned here.

Another option to consider: If you're planning to give $70k, you could split it across multiple years to stay under the annual gift exclusion. Give $17k this year, $17k next year, etc. Then you wouldn't have to file Form 709 at all. Or if you have a spouse, you can do "gift splitting" where each of you is considered to give $35k, which would put you both under the annual limit.

One thing nobody's mentioned - if you're giving this money specifically for education, you could pay his student loans directly or contribute to a 529 plan. Payments made directly to educational institutions for tuition bypass gift tax rules entirely!

Just wanted to add another perspective on timing - if you're concerned about the paperwork but still want to give the full amount now, remember that Form 709 isn't due until April 15th of the year following the gift (so April 2026 for a 2025 gift). This gives you plenty of time to get familiar with the form and maybe consult with a tax professional if needed. Also, don't let the gift tax form intimidate you - it's actually pretty straightforward for a simple cash gift like yours. The IRS instructions are clearer than most other tax forms, and there are good examples included. You're doing a wonderful thing helping balance things out between your kids!