The biggest credit news this week is all about the holidays, as many Americans get a jump start on their holiday gift plans.
Though many Americans aren’t giving away tens of thousands of dollars for the holidays, it’s still important to understand how taxes may impact your generous spirit once the holiday season ends and tax season begins.
Jim Blankenship, a financial adviser and Credit.com contributor, outlined five things Americans need to know about gifts and taxes. Paramount to understanding the tax implications is that there are two limits on gifts the IRS recognizes — an annual limit and a lifetime limit. The annual limit for giving gifts without receiving full value in return (i.e. giving someone $10,000 and getting a truck of equal value in return) is $14,000, meaning any single person can give up to $14,000 to anyone else without paying taxes on that money. They can give that amount to as many people as they want and that amount is doubled for a couple wanting to give money to another person.
When it comes to gift-giving, many people struggle with picking just the right gift for every person on their list. You don’t have to worry about personalizing your gift list with these ideas.
Trae Bodge, senior editor for RetailMeNot’s Real Deal blog, gave us a peek at some of the picks on her gift guides this year. A few of the standouts that could be great for almost anyone on your list are the Philip B Mood Elevator (a personal hygiene kit that’s unisex); the FitBug Orb (a fitness tracking device); and the iGeek portable charger (for anyone with gadgets on the go).
While the holiday season tends to be a time to splurge, many Americans are going the do-it-yourself route this year, and it may be a trend that continues.
According to the Capital One Holiday Survey, 70% of Americans plan to make a gift instead of buying one. Among the most popular do-it-yourself holiday items, 43% of those surveyed would be making holiday baked goods, 42% would be preparing holiday meals, and 18% would be creating some of their own holiday decorations.
What do you think? Are DIY gifts tacky, or frugal and fun? Share your thoughts in the comments.