Money Monday: Picking a Holiday Gift

Gadgets and Toys No Longer the Plan for Girls and Boys    

 I don’t know about you, but trying to figure out out what to gift family members, friends, and children at the holiday’s is like trying to solve a Rubik’s Cube. This year there are two additional factors to consider: inflated prices and the supply chain fiasco. Given these challenges conditions seem ideal to change from giving traditional gifts such as toys, clothes or gadgets. What about  giving something which may not be affected by inflation or the supply chain? What could that be? How about gifting money to a 529 saving plan?

The 529 Plan:

A 529, or education saving plan is an investment account which allows you to pay education expenses for a designated person. There are two types of plan. One is the 529 savings plan and the other is the prepaid tuition plan. What makes 529’s  a wonderful gift is that there could be tax advantages available for your gift contribution. Now tell me, what other holiday gifts can you give to someone and get a tax deduction? Clothes or gadgets don’t do it!

Making a gift like this for the holidays is simple and easy. You may contribute or gift  to an account holder such as your family member or friend, even if you don’t have that person’s details. In the absence of details, you can open a 529 in your name and change the beneficiary from yourself to your gifted recipient later.

Plan, Contributions and Expenses:

Most states and the District of Columbia offer 529 plans. Since most are state administered, each state offers different incentives for their particular plan. You don’t have to open a plan in the state in which reside. For example, you may open a 529 plan where the person plans to attend school and you can open more that one 529 account.

You are probably thinking, you don’t plan to spend that much in gifts this holiday season. You don’t have to! Just spend the same amount you sent last year in 2020. According to Gallop and other polls, the average American spent between $900 and $1,000 in gifts during the 2020 holiday season. You can make a gift contribution for as little as $25 dollars, and there are no annual contribution limits. However, for this year 2021, it’s best to limit your gift contributions to no more than $15,000 per beneficiary. The tax rules outline these limits, and can be very complicated. After all, the plan is called 529 because it’s named after that section of the Internal Revenue Code. Go figure! Let others provide the toys, clothes, and gadget gifts this year and give something more empowering!

Your gift may not only provide you some tax benefits, but could allow the gift recipient to pay for “qualified educational expenses.” What we are really talking about here are expenses such as tuition, computers and related equipment, books and other fees.

Bonus People!

In the event you think the benefit is only for someone in college, these expenses cover expenses from K-12 in tuition and even student loan repayments. How about this perspective! After Covid-19, the world, economic strategies, and finances investors are adopting to a new normal. Why not change the types of gifts you give during this holiday season from clothes and gadgets and make 529 saving plan gifts part of your new normal.

WHAT’S UP!

Today’s what’s up is about more 401 (K) options. Some companies are now allowing their employees to invest in self directed brokerage accounts in their 401(K) plans. Which simply means you can invest your 401 (K) in much broader stock portfolios and take greater control of your investment and risk. Other  401 (K) providers are allowing their employees to invest 5% of their 401(K) plan funds,  into cryptocurrency. Recently, the federal government version of 401 (K) plan,  announced that they are going to allow participants, to invest in more than 5,000 mutual funds through a new self directed brokerage account. The take away here is to check with your employer and see what changes,  if any,  are available to you in your 401 (K) plan and improve your retirement investment income. And that’s what’s up!

 

 

Ruthven R. Phillip, Esq., is a tax attorney, Stewardship and Philanthropy Ministry Assistant, and CEO of Give2Getrich, LLC . Give2Get Rich, LLC 2021. All Rights Reserved. Any distribution or reproduction of part or all of the contents in any form is prohibited.




What to Do With This Stuff: Lessons from Lil Jon’s Crunk Christmas

I’m telling you right now, whenever I get bored during the Christmas season, I’m clicking on “All I Really Want for Christmas!” Overplayed traditional songs are dumped down the drain as Lil Jon empties the eggnog in the sink and replaces it with Kool-Aid. His “carol” is energetic. It’s hilarious. It’s got kids dancing and laughing. It’s got gifts galore and an overflowing buffet. Kool-Aid Man and DJ Santa throwing a party with Lil Jon in someone else’s house!

Most of all, it’s got honesty.

Hundreds of years before the star of Bethlehem, wise men noticed a sign in the sun.

It was at this moment, God did a strange thing: “Howbeit in the business of the ambassadors of the princes of Babylon, who sent unto him to enquire of the wonder that was done in the land, God left him, to try him, that he might know all that was in his heart” (2 Chronicles 32:31). Did God abandon the king? No, he just allowed him space without the intervention of prophets or voices from heaven to specifically guide his thoughts and actions. God wanted to know how deeply His grace in Hezekiah’s life had penetrated the king’s heart. How would Hezekiah respond when the Babylonians came from the East to Jerusalem after seeing a sign from the heavens?

From Showrooms to Stocking Stuffers

Hezekiah got caught up in the moment. Pride blinded him from seeing the opportunity to share his faith. Instead, he showed off his stuff—all his stuff (Isaiah 39:2-4). He turned their minds from the supernatural to the natural. Isaiah announced that the king’s mistake of showing off his riches would lead to the Babylonians returning to plunder those riches and march his people into captivity. The Babylonians were shown someone’s house that seemed to have everything on their carnal Christmas list.

These visitors already had material riches, but thought Hezekiah’s spiritual riches exceeded theirs. It wasn’t Babylonian gods that moved the heavens to save their king, it was the God whose temple was in Jerusalem. They left spiritually unimpressed. Rather than learning more about God, they learned where they could get more gold. How might history have been different if Hezekiah had emphasized the things of God during that show and tell tour?

Greatest Gift of All

Fast forward a few hundred years. A couple with a baby played show and tell when some astrologers from the East came to Jerusalem after seeing a unique movement in the heavens. This sign was a mysterious light that was neither a fixed star, nor a planet. It seemed to urge them to play follow the leader, until they ended up in Bethlehem. The show and tell Mary and Joseph played was a humble game. There were no palaces to tour or delicacies to sample. There was only one main attraction: a baby wrapped in very plain blankets.

God chose where His Son would be born and ordained that there would be nothing about the surroundings that would overshadow His glory. When they saw Jesus, the wise men showed their wisdom by offering their earthly treasures at the feet of the heavenly treasure. For as one author wrote, “In giving up His Son, He [God the Father] has poured out to us all heaven in one gift” (E.G. White, Our Father Cares, 65). The wisdom of the wise men was that they recognized their stuff was nothing compared to Jesus.

Jesus’ parents were regular working class folks without the means to jump up and move to another country to start a new life. However, God richly rewarded them when they shared the one thing on their visitors’ that couldn’t be bought or sold. The material gifts from the Magi of the East enabled Jesus and his parents to seek asylum in Egypt, thus escaping Herod’s murderous rampage (Matthew 2:11-18).

Good Gifts All from God

The lessons from Lil Jon’s Crunk Christmas remind me that it’s easy, whether a rapper or a biblical king like Hezekiah, to lose focus on what’s important. Stuff can crowd Christ out of Christmas. Yet, stuff can be a blessing—depending on how we use it and share it. And we will share it more readily when we remember our stuff really isn’t ours. Just like the house Lil Jon, Kool-Aid Man, and DJ Santa were partying in wasn’t theirs, we have to remember that every good and perfect gift we receive comes from our Father above.