Gift taxes are confusing to most folks. But the following information should make the subject easy to understand. First of all, unless you are very wealthy, you probably don’t have to care very much about gift taxes.

A basic understanding of the federal gift tax is practically known by everyone: you can make a gift of up to $14,000 per year, but anything over that is prohibited.

The problem with that basic understanding is that it is wrong. The magical $14,000 figure is just the number that Congress has set as being too small to even bother thinking about. Nonetheless, it has a strong hold on the public imagination — even though the number has only been set at $14,000 since 2013. The “don’t even think about it” number was $3,000 for four decades before rising to $10,000 in 1982; it started increasing in $1,000 increments in 2002 and will probably rise to $15,000 within the next couple of years.

The current $14,000 figure applies to gifts made to each person, not the total amount of gifts in a year. For example, if you have three children, you can give each of them $14,000 this year, for a total of $42,000, without having reached the threshold. A married couple can give away $28,000 (each giving $14,000) to each person.

In addition, gifts for medical or educational expenses do not count toward the $14,000 annual limit. As long as you make your gifts by paying directly to the college, or hospital, or other provider, there is no $14,000 limit. You can pay your favorite granddaughter’s tuition and books directly, and still give her another $14,000 (double that if you’re married).

Does all that mean you are generally limited to giving $14,000 (each) to each recipient? No. That’s just the level below which you don’t have to do anything else but sign a nice card and make a notation in your check register.

If you want to make a $50,000 gift to your son, or your daughter, or your favorite elder attorney, all you have to do is file a gift tax return.

You won’t actually pay any gift tax unless the total amount you give away (over and above the $14,000 + tuition + medical expenses each year) exceeds $5.43 million dollars in your lifetime. And even that number is going up each year.

The bottom line: if you live in New York, don’t own property in a state that imposes a gift tax, and are worth less than about $5 million, you are simply going to be unable to pay a gift tax over your entire life, no matter how hard you try.

PLEASE REMEMBER: this is information about GIFT TAXES and DOES NOT APPLY TO MEDICAID RULES!! NO GIFTS SHOULD BE MADE IF YOU MAY NEED TO ACCESS MEDICAID ASSISTANCE WITHIN THE NEXT 60 MONTHS!