• Most personal gifts are not tax deductible but there are exceptions to the rule.TAX TIME image by brelsbil from Fotolia.com
  
  Generally gifts given to individuals are not tax deductible, and if these gifts exceed the Internal Revenue Service annual exclusion, they will incur a federal gift tax. It is imperative to know your tax responsibility when giving gifts in order to not increase your tax obligation. Gifts given to spouses, political organizations, educational purposes or certain charitable organizations are generally considered to be tax deductible.
  
  

Annual Exclusion

• According to the Internal Revenue Service, a certain amount can be given as a gift without affecting the gift tax. This is called the annual exclusion and the amount changes frequently, so it is best to check the IRS website for the current amount. Any gift that is equal or less than the annual exclusion does not cause any tax liability; however, it is not tax deductible. Payments made to medical or educational institutions are exempt from the annual inclusion. These donations are not subject to gift taxes. If you are married, your spouse and you can separately give gifts up to the applicable exclusion amount without making a taxable gift.
  
  

Charitable Organizations

• Certain organizations listed with the IRS in Publication 78 qualify for tax deductible gifts. Cash or property donations to these organizations are tax deductible. Some organizations may not be listed in Publication 78, but if they have a ruling or determination letter that allows contributions to be deductible, the letter is valid and serves as evidence to contributors. Newly recognized organizations are listed in the quarterly supplements to Publication 78, and organizations can be deleted from the Publication 78 if the IRS determines they no longer qualify.
  
  

Gifts to Spouse

• Personal gifts to spouses are tax deductible and you must file a gift tax return if it does not meet the exceptions described in life estate with power of appointment. A gift tax return must also be filed if your spouse is not a U.S. citizen and the gift exceeds the specified amount determined by the IRS for the year. However, if these situations do not apply to you, then there is no need for you to file a gift tax return regardless of the amount of the gifts and whether the gifts are present or future interests.
  
  

Educational Exclusion

• There is also an educational exclusion for the amount you paid for an individual in a domestic or foreign educational institute for tuition. According to Dana S. Beane & Company, a certified public accounting firm, "A qualifying educational organization is one that normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on."
  
  

Medical Exclusion and Political Organizations

• The medical exclusion states that a gift related to medical expenses is tax deductible if it was given on behalf of an individual for medical care. However, the payment must have been made to the care provider. This does not include payment that is reimbursed by the donee's insurance. Transfers to political organizations are also tax deductible if it is for the use of the organization.