As of 2023, every individual has a $17,000 gift tax annual exclusion. This means that you can give someone up to $17,000 per year without having to report it to the government. If you're married, both you and your spouse can give $17,000 each to the same individual, effectively doubling the exclusion to $34,000. 

Recipients of gifts do not need to report them or pay gift tax. The responsibility for reporting and potential taxation lies with the giver. 

Gifts exceeding the annual exclusion limit are considered reportable gifts. However, reporting a gift does not necessarily mean paying a gift tax. The amount over the annual exclusion is subtracted from the lifetime gift tax exemption. 

As of 2023, the lifetime gift tax exemption is approximately $12.9 million for singles and $25.8 million for married couples. This means that you can give away up to these amounts over your lifetime without incurring gift tax. 

The lifetime gift tax exemption may change due to legislative actions. To secure the current exemption, individuals with significant estate exposure may consider gifting strategies before any potential reduction of the exemption. 

If you are married, you and your spouse can "split" gifts and give up to $34,000 to an individual or $68,000 to a couple per year. This allows you to leverage the annual exclusion effectively and increase the total amount gifted. 

Direct payments made to educational institutions for someone's tuition or to medical institutions for someone's medical expenses are not considered reportable gifts. However, it is important to make the payments directly to the institutions rather than giving the money to the individual. 

When gifting assets such as stocks, real estate, or vehicles, the recipient assumes the donor's cost basis and holding period. This can have potential tax advantages if the recipient's tax situation is more favorable. 

Irrevocable trusts are complex and require careful consideration. Once assets are transferred to an irrevocable trust, they cannot be easily reclaimed. Seek professional advice if you are considering this gifting strategy. 

For individuals with a high net worth and potential estate tax liability, strategic gifting can be an essential component of estate planning. Taking advantage of the current exemption levels before any potential reductions can help minimize estate taxes in the future. 

Understanding the basics of gift tax empowers individuals to make informed decisions about gifting strategies. By staying within the annual exclusion limits, utilizing gift splitting for married couples, and considering strategic gifting of assets, individuals can optimize their gifting plans while minimizing tax implications. It is crucial to consult with a tax professional or estate planning attorney for personalized advice based on your specific circumstances.