The holiday season is a time to reflect, celebrate, and give. It’s an opportunity to show appreciation for the people in your life and share with them your blessings—usually in the form of gifts stacked under the tree.
Listening to squeals of delight as your loved ones unwrap their gifts is fun, but the joy fades with time. Clothing wears out. Electronics become obsolete. Fads fade. This year, consider giving them something that keeps giving to them year after year.
- Education Expenses: You can change the life of someone close to you by covering education expenses. One way to do this is through a 529 plan. The recipient can use this tax-free money to pay for school, and you may be able to claim a tax deduction for what you put in the account.
- Charitable Contributions: Sharing your wealth with your family is generous, but you can reach more people through donations to charities. Consider giving money to your alma mater, your church, an animal rescue, or a cause you believe in. In most cases, you can claim these gifts as deductions.
- Savings Accounts: Preparing for the future shows that you care about your loved ones. If someone you care about has special needs, you may be able to open and fund an ABLE account to cover medical costs. This account doesn’t affect Medicaid benefits and can be used tax-free for qualified expenses.