helping parents with finances

[Tiggeroo]

if you help your parents with finances for awhile are you able to deduct this as a charitable contribution on income tax?

 

[pearlieq]

In general, no. Deductable contributions need to be made to a charitable orgaization that meets government criteria.

http://www.irs.gov/newsroom/article/0,,id=106990,00.html

Would be nice though!

 

[MaryAnnDVC]

No.

* You cannot deduct contributions made to specific individuals, political organizations and candidates. Nor can you deduct the value of your time or services and the cost of raffles, bingo or other games of chance.
* To be deductible, contributions must be made to qualified organizations.

 

[Tiggeroo]

it won't affect the help, just wondering. DF got laid off two years short of retirement. He drives commercial oil truck/vehicles. We are worried that he may have a hard time finding a new job at his age.

 

[Galahad]

No, it's just a gift. And, if you give them more that $10,000 (each) in a given year, they will have to declare the excess as income on their taxes.

 

[MaryAnnDVC]

No, it's just a gift. And, if you give them more that $10,000 (each) in a given year, they will have to declare the excess as income on their taxes.

Nope.

Recipient Doesn't Report Income

Gifts you receive aren't considered income. It doesn't matter how large they are. You don't report them on your income tax return in any way.
There are a couple of important qualifications on this simple rule:

• True gifts. This rule applies only to true gifts. You can't avoid paying income tax by calling something a gift when it isn't. For example, a "gift" you receive in exchange for services or some other consideration isn't a gift.
• Income after gift. If you receive a gift of property that produces income, you must report any income produced after the gift. For example, if you receive stock as a gift, you must report any dividends paid on that stock after the gift.

 

[Bob Slydell]

No, it's just a gift. And, if you give them more that $10,000 (each) in a given year, they will have to declare the excess as income on their taxes.

The reporting requirements (e.g. $10,000 a year) are on the donor, not the recipient.

 

[Mary Anne]

If you can prove you are giving them $1.00 more in income they they are getting you can take them as a dependent even if they don't live in your household.

 

[Bob Slydell]

If you can prove you are giving them $1.00 more in income they they are getting you can take them as a dependent even if they don't live in your household.

Provided they have less than $3,300 of gross income:

http://www.irs.gov/publications/p501/ar02.html#d0e4195

 

[barkley]

If you can prove you are giving them $1.00 more in income they they are getting you can take them as a dependent even if they don't live in your household.

not entirely true-they have to meet all of the criteria of being a dependant (and that carries some limitations on how much their income is). thing is it can be detrimental to let someone list you as THEIR dependant-beyond the tax issues on your own income, some pension based health benefits carry a clause that adults can only be covered if they are not the claimed dependant of anyone other than their spouse (if it's the spouses' coverage).

 

[Mary Anne]

Well it is an option that the original poster should be aware of and check it all out, it might be to her benefit and it would be a shame not to use it if she met all the criteria.

 

[Tiggeroo]

i'm not going to meet the criteria. Myself and my siblings are all going to chip in together to help parents out and make sure their health insurance coverage doesn't lapse.

 

[Acklander]

If you have your own business, you could put them on the payroll - therefore you have the deduction and they add it to their income.

 

[barkley]

i'm not going to meet the criteria. Myself and my siblings are all going to chip in together to help parents out and make sure their health insurance coverage doesn't lapse.

that realy great of you and your sibs to do! just as a suggestion-if your parent's plan has an open enrollment period you might suggest someone sit down and look over the offerings with them-my mom went with one particular offering forever despite the horrible costs, when my brother and i sat down and looked at her open enrollment materials we realized all of her doctors and the services she would ever reasonably need were covered under another plan with a much lower premium. the trade off was a bit higher co-pay, but when we crunched the numbers we realized it would have taken hundreds of appointments per year to cost her as much out of pocket as the more expensive plan was running her. if your parents receive social security and the medicare linked to it-make sure any employers (past or current) who provide med insurance know-it can result in a much lower premium (when i got medicare my 'family' plan dropped the premium by over 50%-and i still have the same coverage-they just bill medicare first).