You may have to file a gift tax return for presents on the expensive side…
We all know that we can’t write off a designer bag or a watch that we’ve bought for ourselves. On the other hand, let’s say you want to surprise someone with a brand new first car for the holidays. If you didn’t know, the IRS establishes an limited amount until you have to file a tax return, just for the gift you’re planning on giving!
Here’s what you need to look out for when you’re going all out for the holidays.
First off, what is the federal gift tax?
The federal gift tax applies to the transfer of money or property to an individual while receiving less than the full value in return or nothing at all. There is a gift tax exclusion (subject to inflation per tax year) which sets a limit of how much in value they can gift per person before having file Form 709 to the IRS.
Here are the gift tax exclusion amounts from tax years 2002 to 2018. Continue reading “The Holidays are Coming and so is the Gift Tax!”
It’s almost time to bust out the wrapping paper and tinsel!
Yes, it’s that time of year again. It’s the season of giving. Before you get wrapped up in holiday parties and stocking stuffers, you’ll want to make sure that you’re mind isn’t blurred with visions of sugarplums and too much eggnog.
January marks the start of tax season and we want to make sure that you’re ready. That includes reporting those holiday gifts to charity as tax deductions.
How do I donate?
We tend to think that the only way we can help out in society is by breaking out our checkbooks and tacking on as many zeros as our bank accounts will allow. Money is great. But it’s not the only way. It’s also probably the main reason why the majority of us end up doing nothing. We simply can’t afford to.
Seeing as our daily lives revolve around checking up on ourselves (our bank accounts, our smartphone notifications, our Tinder profiles), it’s easy to forget that taking the time out for others is also considered a charitable donation.
If you can write out a check, then all the more power to you! If you can’t, don’t downgrade the time you can spend helping out at your local soup kitchen or cleaning out your closet to donate those jeans and blazers you never ended up wearing. Your nearest Goodwill or Salvation Army will take them off your hands.
Where should I donate?
The dilemma for some of us is that we don’t know where our hard earned dollars are going when we donate to a charity. We understand! Who wants to spend time researching a reputable charity to support and then not be certain that they are using your money the right way? Continue reading “Holiday Tax Deductions: Gifts to Charity”