Gifts are not tax deductible for the person who gives them

If you give money or property to someone as a gift, you cannot deduct that gift on your federal income tax return. The IRS does not allow a deduction for personal gifts, regardless of the amount or who receives it. This applies whether you give to family, friends, charities, or anyone else.

The only exception is gifts to may have access to charitable organizations. If you donate to a registered nonprofit, religious institution, or other IRS-approved charity, that donation may be deductible. But a gift to an individual person — even a family member in financial need — is never deductible.

There is also a separate rule about how much you can give without filing a gift tax form. That rule does not make the gift deductible; it just determines whether you have to report it to the IRS. Many people confuse the two.

Key Takeaways

  • Personal gifts to individuals are never tax deductible, no matter the amount or relationship.
  • Charitable donations to registered nonprofits, churches, and may have access to organizations may be deductible if you itemize deductions on Schedule A.
  • The annual gift tax exclusion ($18,000 per person in 2024, varying by year) determines whether you file a form, not whether you get a deduction.
  • Gifts to family members in need, medical bills you pay for someone else, and tuition you pay directly to a school are not deductible even though they help someone financially.
  • You must keep receipts and documentation from the charity to support any charitable deduction you claim.

How the gift tax exclusion works and why it is not a deduction

The IRS allows you to give a certain amount to other people each year without filing a gift tax return. For 2024, you can give up to $18,000 per person per year without reporting it. This amount changes each year and is indexed for inflation.

This exclusion is often confused with a tax deduction. They are different. A deduction reduces the income you report on your tax return. An exclusion means you do not have to file a gift tax form (Form 709) at all. You still cannot deduct the gift from your income.

If you give more than $18,000 to one person in a single year, you must file Form 709 to report the excess. Filing the form does not mean you owe tax — it just means you are using part of your lifetime gift and estate tax exemption. Most people never owe gift tax because the lifetime exemption is very high (over $13 million in 2024). But you still get no deduction for the gift itself.

When charitable donations are deductible

Donations to may have access to charities are the only gifts you can deduct. The organization must be registered with the IRS as a tax-exempt entity. This includes most nonprofits, religious institutions, educational organizations, hospitals, and public charities.

To claim a charitable deduction, you must itemize deductions on Schedule A of your tax return. Most people take the standard deduction instead, which means they get no benefit from charitable giving. For 2024, the standard deduction is $14,600 for single filers and $29,200 for married filing jointly. You only benefit from itemizing if your total itemized deductions exceed these amounts.

You can donate cash, property, stocks, or other assets. The deduction is limited to a percentage of your adjusted gross income, which varies by the type of charity and the type of property. For cash donations to most public charities, the limit is 60 percent of your AGI. Donations of appreciated property have lower limits.

What documentation you need for a charitable deduction

The IRS requires proof of every charitable donation you claim. For cash donations under $250, you need a bank record or written communication from the charity showing the name, date, location, and amount. A cancelled check, bank statement, or receipt from the organization counts.

For any single donation of $250 or more, you must have a written acknowledgment from the charity. The charity must provide this letter, and it must state the amount, whether you received anything in return, and a description of any goods or services the charity gave you. You cannot write this letter yourself.

If you donate property instead of cash, you need a receipt from the charity and a written valuation. For property worth over $500, you must file Form 8283 with your tax return. For property worth over $5,000, you need a may have access to appraiser's written appraisal.

Gifts that look like deductions but are not

Several situations feel like they should be deductible because you are helping someone financially, but the IRS does not allow them. If you pay a family member's medical bills directly to the provider, you cannot deduct them. If you pay tuition directly to a school for someone else's child, you cannot deduct it. If you give money to a friend to cover their rent or utilities, you cannot deduct it.

There is one narrow exception: if you pay medical expenses for a dependent you claim on your tax return, those expenses may be deductible as medical expenses on Schedule A — but only if you itemize and only if your total medical expenses exceed 7.5 percent of your AGI. The deduction goes on your return, not the dependent's.

Student loan interest paid by someone other than the borrower is also not deductible. Only the person whose name is on the loan can claim the student loan interest deduction, up to $2,500 per year.

How to report charitable donations on your tax return

If you itemize deductions, you report charitable donations on Schedule A (Form 1040). List each donation separately if you want to, or combine them by category. You do not need to attach receipts to your return, but you must keep them for your records in case the IRS asks.

If your total charitable donations for the year are substantial, consider using tax software that walks you through the questions or working with a tax professional. The software will calculate whether itemizing saves you money compared to taking the standard deduction.

If you do not itemize — which is the case for most people — you receive no tax benefit from charitable donations. This changed in 2017 when the standard deduction nearly doubled. Before you donate, calculate whether your total itemized deductions would exceed the standard deduction for your filing status.

Frequently Asked Questions

Can I deduct a gift to a family member who is struggling financially?

No. Gifts to individuals are never deductible, even if the person is a family member or in financial hardship. The only exception is if you pay a dependent's medical expenses and you itemize deductions on Schedule A — then the medical expense itself may be deductible, not the gift.

What if I give money to a church or religious organization?

Donations to churches and other may have access to religious organizations are deductible if you itemize. You need a receipt or written acknowledgment from the church showing the amount and date. Many churches provide annual giving statements in December for this reason.

Do I owe taxes on money I receive as a gift?

No. The person who receives a gift does not report it as income on their tax return. Only the person who gives the gift might have to file a gift tax form if the amount exceeds the annual exclusion — but even then, no tax is usually owed unless the lifetime exemption is exhausted.

If I give more than $18,000 to someone in one year, do I owe gift tax?

Not necessarily. You must file Form 709 to report the excess, but you do not owe tax unless you have already used up your lifetime gift and estate tax exemption. For most people, this exemption is so high that gift tax is never owed. Filing the form straightforward documents the gift for IRS records.

Can I deduct donations of property or used items?

Yes, if you donate to a may have access to charity. You need a receipt from the charity and a reasonable valuation of the property. For items worth over $500, you must file Form 8283. For items worth over $5,000, you need a professional appraisal. Donations to individuals are not deductible.