By: Alex Simons
Download a PDF file of the article here.
December 31 is the deadline for most gifts to count toward your 2026 limits — and this year's rules look different from any year before.
December 31 is the deadline for most gifts to count toward your 2026 limits — and this year's rules look different from any year before.
2026 is also the first year under the estate, gift and charitable rules set by the One Big Beautiful Bill Act (OBBBA). Some strategies became more valuable, and a few familiar habits now deserve a second look. Below, we walk through the moves worth considering before year-end.
1. Use your $19,000 annual exclusion (per person)
In 2026, you can give up to $19,000 to any number of people without filing a gift tax return or touching your lifetime exemption. The amount is unchanged from 2025. A married couple can combine their exclusions to give $38,000 per recipient.
The math adds up quickly. A couple with three children and four grandchildren could move $266,000 out of their estate this year with no gift tax and no paperwork beyond good records.
A few practical notes:
The exclusion is use-it-or-lose-it. It resets each January 1, so 2026 room that goes unused is gone.
Checks must clear in time. A check generally counts in the year the recipient deposits it, not the year you write it. Mail early, or use a direct transfer.
Gifts of appreciated stock carry your cost basis. The recipient inherits your original purchase price. That can make gifting stock to a family member in a lower tax bracket efficient, but it also means they, not you, may owe the gain when they sell.
Going over isn't a penalty. A gift above $19,000 simply requires filing Form 709. The excess is subtracted from your lifetime exemption; no tax is due unless that exemption is used up.
Some transfers sit outside these limits entirely. Gifts to a U.S.-citizen spouse are unlimited. Tuition and medical bills paid directly to the school or provider don't count as gifts at all, more on that below.
2. Revisit your estate plan under the new $15 million exemption
For years, families planned around a looming "sunset" that would have cut the lifetime exemption roughly in half in 2026. That cliff never arrived. Instead, the federal estate and gift tax exemption rose to $15 million per person ($30 million per married couple) on January 1, 2026, up from $13.99 million in 2025. It is now permanent law and will be indexed for inflation starting in 2027.
What that means for you:
The urgency has eased, not the opportunity. Large "use it before you lose it" gifts are less pressing. But assets given today move future growth out of your estate.
Documents written around the sunset may need updating. Formula clauses, trust funding and credit shelter provisions drafted for a lower exemption can now produce results you didn't intend.
State rules still apply. Some states levy their own estate or inheritance taxes with much lower thresholds. Where you live, and where you own property, matters.
Year-end is a natural time to pull your estate documents out and confirm they still say what you want.
3. Give the gift of education
Education is one of the most tax-efficient ways to help the next generation. Two strategies stand out.
Superfund a 529 plan. Contributions to a 529 count as gifts, but a special election lets you spread one large contribution over five years. That means you can put up to $95,000 per beneficiary ($190,000 for a married couple) into a 529 in 2026 without using any lifetime exemption. The money then grows tax-deferred and comes out tax-free for qualified education costs. One caution: a superfunded gift uses up your annual exclusion for that beneficiary for the full five years, and it requires a Form 709 filing.
Pay tuition directly. Tuition paid straight to a college or private school is not a gift at all. It doesn't count against your $19,000 exclusion or your lifetime exemption, and there is no dollar cap. The same rule applies to medical expenses paid directly to a provider. The key word is directly: writing a check to your grandchild so they can pay the bill doesn't qualify.
Many states also offer an income tax deduction for 529 contributions to their own plan. Check your state's rules before choosing where to open an account.
4. Rethink charitable giving for the new rules
Charitable giving changed more in 2026 than any other area of gifting. The new rules reward planning and can quietly shrink the deduction for donors who give the way they always have.
What changed in 2026
New deduction for non-itemizers: up to $1,000 single / $2,000 joint
0.5% of AGI floor. Giving below 0.5% of your AGI earns no deduction. At $400,000 of AGI, the first $2,000 is non-deductible.
Deduction value capped at 35%. Each dollar deducted saves at most 35 cents instead of 37 if you are in the 37% tax brakcet.
QCD limit rises to $111,000
Qualified charitable distributions (QCDs) are now among the most efficient ways to give. If you're 70½ or older, you can send up to $111,000 directly from your IRA to charity. The gift never shows up in your income, so it isn't affected by the new floor or cap. Once you reach RMD age, a QCD can also count toward your required distribution. Married couples can each give from their own IRA.
Donate appreciated stock instead of cash. Gifting long-held securities lets you deduct their full market value and avoid capital gains tax on the growth. For itemizers, this is often worth more than writing a check.
Bunch gifts with a donor-advised fund. Rather than giving the same amount each year, consider front-loading several years of giving into a donor-advised fund. You clear the 0.5% floor once, take a larger deduction this year, and recommend grants to charities over time. In the off years, you take the standard deduction.
And if you take the standard deduction, keep receipts for your holiday giving this year: cash gifts to public charities now count toward the new $1,000 / $2,000 deduction.
Giving with intention
The best gifts reflect what matters most to you family, education, community, the causes that shaped you. Efficient planning simply makes sure more of each dollar reaches the people and organizations you care about.
Every family's situation is different, and these strategies work best when they're coordinated with your tax, investment and estate plans. If you'd like to talk through your year-end giving, schedule a conversation with the Pillar team before the holiday rush.
Securities and investment advisory services offered through LPL Enterprise (LPLE), a Registered Investment Advisor, Member FINRA/SIPC, and an affiliate of LPL Financial. LPLE and LPL Financial are not affiliated with Pillar Wealth Partners.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
