The Flinchum File

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THE Season of Guilt

First, there is Thanksgiving Thursday, followed by Black Friday, followed by Cyber Monday, followed by Giving Tuesday, which was yesterday.  Some people refer to the Season of Giving as the Season of Guilt.  When the continuous Medicare commercials end on December 7th, you will notice a surge in commercials featuring sick kids or suffering animals.  You know . . . show some Christmas spirit by getting rid of some money!

As a financial planner, I don’t push clients to make gifts.  Mostly, I help them make decisions, primarily from a tax planning standpoint.  There are four things I keep in mind.  First, there is the $15 thousand annual limitation per recipient.  You can give away that amount each year to almost anybody, not just family.  Combined with your spouse, you could give somebody $30K each year.  It is not a deductible expense for you and is not taxable to them.

Second,  you can make unlimited gifts to schools and medical institutions for the benefit of somebody else.  Again, it is not deductible for you nor taxable to the recipient.

Third, there are large gifts, to utilize the “lifetime exemption”, which is more useful as an estate planning tool than assuaging your annual guilt. (To be discussed in a future blog.)

Fourth, you can give money directly to charities, which is tax deductible for you.  Just make sure they are 501(c)3 charities.  Normally, there is a limitation on the amount, but that is waived for 2020.

However, as a financial planner in 2020, I am telling clients to give, give, and give, because 2020 is THE Season of Giving.  There is more suffering this holiday season than any in my lifetime.  In addition to the normal display of sick kids and suffering animals, whoever imagined such food-lines in America?  More Americans died this year from Covid-19 than the total dead in all wars since World War II.   This season . . . things really are different!  They’re worse.

If you’re still thinking about gifting this season, stop thinking and JUST DO IT . . .  NOW!

If you’ve already done your gifting this season, then GIVE MORE!