Instead of giving your grandchildren the latest tech gadget or cash they may blow through by New Year’s, consider financial gifts of lasting – even increasing- value. In many cases, these gifts can also provide tax advantages.
For youngsters starting to learn about saving and investing.
- Teaches the value of patience
- Can be held by minors in their own names
- Possible tax benefits if used for education expenses
529 plan contribution
For school-age kids (and parents worried about upcoming education bills)
- Distribution for qualified education expenses are generally tax free
- Some states allow deductions for contributions to their plans
- Front-load five years’ worth of annual gift tax exclusions, up to $70,000 per grandparents to each grandchild in 2017
For your favorite college student
- Not treated as taxable gift if made directly to the education institution
- Ensures that gift is used as you intended
Other rules and restrictions apply. Contact us for more information.