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MONEY-WISE GIFTS
FOR THE HOLIDAYS
When buying presents at
this time of year, people often spend a lot of money
without being sure that they’ve really found the right
gift. While it is surely the thought that counts, it’s
also great to be able to give a present that’s truly
appreciated by the recipient.
According to the Wisconsin
Institute of CPAs, there are many financially savvy ways
to indulge or honor a loved one. If you’re tired of
buying the same old ties or scarves, here’s a look at
some sensible—-and satisfying-—ways to get the most for
your holiday gift dollars.
SAVING FOR TOMORROW
An investment in the
future is often the most thoughtful present. A U.S.
savings bond is a popular gift solution for a young
child or student. In addition to being a safe
investment, a U.S. savings bond can also introduce
youngsters to the value of saving, and they offer
federal and state income tax benefits. Some of these
bonds, which are issued by the U.S. government, can be
purchased for as little as $25. They earn interest or
increase in value while they are held, depending on the
type of bond chosen. The federal government offers more
information about savings bonds at
www.savingsbonds.gov.
ONE SIZE FITS ALL
If you’re not sure about
the best present for one person on your list, a gift
card or gift certificate allows the recipient to buy
just what he or she wants. CPAs do offer some advice on
using them, based on alerts from the Federal Trade
Commission and other watchdog groups. First, when buying
a gift card, ask what fees are involved. Gift card
issuers may collect a fee for purchasing the card, may
deduct monthly fees until the card is used and may
charge the recipient for using it. Ask, too, if the
recipient can get a replacement if the card or
certificate is lost or stolen, and if the card will
expire after a certain period.
CONTRIBUTE TOWARD
COLLEGE
529 plans are savings
vehicles that families can use to put away money for
college without paying federal tax on their
distributions (there may be state tax advantages too,
depending on the state and the plan). Taxes on earnings
within the plan are deferred and when money is withdrawn
for qualified educational
expenses, the distributions are tax free. Anyone—-a
grandparent, aunt or uncle or even a family friend—-can
contribute to a 529 plan. If you’re looking for a great
way to finance a loved one’s education, consider
starting or adding to a 529 plan at the holidays.
DONATE TO A GOOD CAUSE
Wondering what to get for
the person who has everything? The best choice may be to
make a donation in their name to a worthy cause that’s
important to them. You’ll be showing you care about
their interests and making the world a better place at
the same time. There are many causes to choose
from—rescue services, environmental groups, animal
welfare organizations, human rights groups. Some
organizations make it possible to use your donation to
pay toward something specific, such as saving an area of
natural habitat or buying livestock for an impoverished
village in the recipient’s name. Investigate your
options and find out the best way to give a gift that
will make a difference.
SEEK ADVICE FROM A CPA
It’s possible to have fun
with your holiday gift giving and still make prudent
purchases. Your CPA can help. Ask him or her for more
insights into any of the ideas in this
article, or about other
satisfying ways to make the most of your gift-giving
budget.
The WICPA is the premier professional organization for
Wisconsin CPAs, with more than 8,200 members working in
public accounting, industry, government and education.
Please include the CPA credential in source
identification. Like other professionals, certified
public accountants are required to obtain additional
education, take a rigorous exam and become
certified. Please identify all CPAs by including the
credential with their names. This identification
enhances the accuracy and credibility of your reporting.
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Produced in cooperation with the AICPA
©2006 The American Institute of Certified Public
Accountants
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