There’s no doubt about it—the Coronavirus and subsequent quarantine have altered any and all plans we had for 2020. From lost jobs to lost social lives, these past few months have been difficult, to say the least.
One area in which we have been hit hardest is monetarily—as of June, Ohio’s unemployment rate was 16.8 percent, two points higher than the national average. Although the outlook is bleak, there are many ways to offer assistance.
“As the law stands now, you can donate up to $15K per individual, per year,” Steve Wolterman explains. “In addition, the money you give (and receive) doesn’t have to be paid back, nor does it need to be reported on your taxes.”
For those who may be in a position to help family members with lost wages, jobs or entire businesses, Steve offers three tips on the ins and outs of gifting money:
1. Learn the gift rule. The annual gift exclusion was raised to $15K in 2018. “I think many people [who] go on managing their own affairs without advice from CPAs and attorneys are simply unaware of beneficial tax laws.”
2. Know the limits. Although you can write a check tomorrow, you can only give up to $15K per individual. For example, “If you have 10 children, you can gift each of them $15K this year,” Steve explains. “If all 10 are married, you could gift each child and spouse $15K each, or $30K per couple. You just can’t give more than $15K to a single person without triggering gift tax reporting.”
3. Ask a certified professional. If you want to financially help someone struggling to pay bills, you can give him or her up to $15K without any concern for tax consequences. If you have questions, you should call an estate planning attorney or your CPA.
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