The holiday season is closing upon us quickly, which means it is time to start reviewing your gift giving plans today. Don’t wait until the last-minute to take advantage of these basic planning opportunities:
- Gifts – You can give $14,000 this year to a child or grandchild. If married you can double that gift to $28,000. Any appreciation in these gifts to heirs will escape the estate tax (currently 40%), and you get the benefit to see how they handle the funds while you are living. In addition, direct tuition payments for students don’t count against your $14,000 which may allow you to accelerate your giving.
- Charitable Contributions – Unless you have been asleep for over a year tax rates are up in 2013. Consider accelerating your deductions (making 2014 charitable gifts in 2013) to lower that tax bill. Be cautious however as the phase-out of itemized deductions are back this year. NEWS FLASH… Don’t give cash (already paid your tax) on gifts over $5,000… make sure that you donate appreciated securities such as stocks. The appreciation escapes capital gains tax (which is higher this year) and you still get the full value of the deduction. Please don’t flush good money down the toilet!
As with everything we suggest you coordinate this with us and your tax advisor to make sure this matches your personal situation.
We posted a link to a good advanced planning article on charitable giving on our Landmark Facebook and Twitter (@LandmarkFin) pages today, so check that article out if you are looking to supercharge your charitable deductions.