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Houston County Living

Christmas Gifting

Dec 08, 2021 04:03PM ● By Griggers Wealth Management

The holiday season is a time where we gather and make tons of memories with our closest friends and loved ones. Whether it’s over enjoying a nice meal, playing board games, volunteering, sipping eggnog or giving a thoughtful gift, it is time well spent. In a traditional sense, gift lists are made by children young and some old to have Santa bring them the items they wish for but only if they are not on the naughty list. It is fun to look back on old times and traditions and make new memories, right? What if I told you, you could give a financial gift to your child/children’s future without paying taxes on the money you gift them? Keep reading to learn more. Presents are an opportunity to have a conversation about being efficient financially with any money they receive. 

With gifting there are 2 options:

-Gifting directly to your child

-Gifting on behalf of them for a specific purpose

Gifting Directly

In 2021, you may give up to $15,000 per child. So, if you have 3 kids you could give up to $45,000. That amount would double if each child were married. The good thing is none of those gifts count towards your lifetime gift exemption amount of $11.7 million which would be affected if one were to exceed those limits and die this year. In 2022, we will see an increase in the gift tax annual amount and the life exemption amount to $16,000 and $12.06 million.

Gifting for a Purpose

Exceptions to the annual gift limit would be to pay the medical bills of a loved one with the payment going directly to the medical provider or tuition payments with the payment going directly to the institution of choice.

Securities and advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC.

Content in this material is for general information only not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.