Gifts for the Holidays You Need to Give! - Slimmer Payments

Gifts for the Holidays You Need to Give!

Money And Coins Falling From Sky

With continued stay-at-home orders and the impact of the COVID-19 pandemic on the personal finances of so many Americans, the Holiday Season certainly is feeling a little less merry this year. But that doesn’t mean all gifts for the holidays have to stop.

You can still give your family Holiday gifts. It may just take a little more insightful budgeting or creative thinking this year. Beyond making a realistic Holiday budget and sticking to it, here are three more “gifts” you can give to your personal finances this Holiday Season.

1. If you are gifting money, be smart about it

If you are in a position to help out family members that may have been hit hard by the coronavirus, this Holiday Season may be a great time to give your family a financial gift. However, it is necessary to be smart in order to avoid additional tax filing or liabilities. The annual gift tax exclusion allows a gift of $15k/year per recipient, per giver. This means that a married couple can give $30k/year to as many recipients as they like without tax implications.

2. Give the gift of charity

The holiday season is an ideal time to help those less fortunate than yourself. If you are in a position to help, without burdening yourself, numerous organizations need extra help this year. Charitable giving can also be a gift you give yourself by reducing your tax liabilities. One way to do this is by making charitable contributions directly from a traditional IRA account. Instead of taking your annual required minimum distribution (RMD), if you make a contribution in the amount of your RMD directly from your IRA to a qualified charity—such as a church, educational organization, nonprofit hospital, medical research organization, or other qualifying nonprofit charity—you can avoid the tax liability you would otherwise incur.

3. Give the gift of a financial plan

The best gifts for the holidays that you can give yourself—or your loved ones—are the gifts of financial plans. A financial plan is like a financial roadmap. It helps you stay on track to meet your financial goals. It also ensures you have a well laid out plan for investing towards retirement and major life milestones like buying a house, paying for college, and being able to provide your family with a comfortable future.

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