Gifting Clubs have been around for generations and is considered an informal or forced savings club. You can gift a certain amount annually to as many recipients as you desire, According to the IRS this is legitimate, because the law allows you to give someone up to $18,000.00 as of 2024, without a tax consequence.

The sender or giver of the gift is responsible for paying the revenue taxes on the money as earned income.

Any transfer to an individual, either directly or indirectly, where full consideration that money is a gift and has no-strings attached with no expectations of the money being returned.

The annual exclusion allows you to gift someone up to a certain amount without reporting it to the IRS. For 2024, the gift tax exclusion is $18,000.00, this is a $1,000.00 increase from the allowable amount in 2023. If you give more than this amount you may need to file a gift tax return, but it doesn’t necessarily mean you’ll owe taxes on the gift.