One of the least-understood tax rules is the federal gift tax. Gift taxes are paid by the grantor, not the recipient. But taxes are seldom owed, even on substantial gifts, because everyone gets a credit that exempts up to $1 million of taxable gifts over your lifetime.

Still, you must keep track of your largess and file a gift-tax return — Form 709 – for any gift to an individual that exceeds the annual gift exclusion, which is $13,000 this year. You can give $13,000 each to any number of individuals without worrying about the gift tax. You and your spouse can give up to $26,000 of either one of your assets per person, as long as the spouse agrees not to give the person another dime during the year.

You don’t get an income-tax deduction for such gifts, but there’s an important advantage: Assets given away during your life — and any future appreciation — won’t be in your estate to be taxed after you die.

Why worry about the gift exclusion as an end-of-year maneuver? If you don’t use your $13,000 annual exclusion by December 31, you lose it forever. Each new year presents you with a new exclusion, but you can’t reach back to benefit from a previous year’s unused allowance. Next year, the gift-tax exclusion will remain at $13,000.

Assume, for example, that a couple plan to give $50,000 to their son. If they give him all of the money during one calendar year, only $26,000 of the gift would be sheltered from the gift tax. The other $24,000 would eat into the credit that shelters $1 million of taxable gifts. However, if $26,000 was given in December and the balance in January, the full $50,000 would be protected. If you make a gift by check, be sure the recipient cashes it before the end of the year because when it comes to gifts, the IRS considers it given in the year the check is cashed.

Another option is to fund a 529 state-sponsored college-savings plan for your child or grandchild. You can contribute up to five years’ worth of gifts at once, meaning you could contribute up to $65,000 per child or up to $130,000 if you and your spouse make a joint contribution this year. Contributions to 529 plans are not deductible on federal tax returns, but some states offer deductions on state returns.