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Money Savings and Tax Tips for the Holidays

Money Savings and Tax Tips for the Holidays

by | 52 Tax Tips and Weekly Financial Blog

 

 

The Holiday Season is finally here. The bright red ornaments, Santa himself and the dazzling colorful gift-wrapped parcels sitting almost everywhere in town surely entices you to indulge in the holiday spirit. The holidays are upon us. It should be a pleasant time, but too often the enjoyment we experience is followed by financial stress, worries and/or headache

Money Savings Tips

January’s bank statements and credit card statements bring the realization that once again, we have lost control of our spending habits and busted our budget. Who says we shouldn’t enjoy? We should enjoy the holiday spirit but remember that enjoying does not necessarily translate into overspending.

Before the holidays begin, you should consider making a budget. Estimate the cost of what you plan to buy, and if the total cost is manageable, then stick firmly to it as you shop. If it’s not, then look for ways to cut back.

Typically, use the rule of thumb: YOUR CREDIT CARD BILL FOR THE HOLIDAYS SHOULD BE PAID OFF IN 90 DAYS. If it takes more than 90 days to pay your holiday credit card off, that means you spent more than you should have.

Consider ways to save on holiday gifts:

  1. Many families can draw names and give one nice gift to a person rather than multiple small ones.
  2. Make or bake gifts instead of buying them.
  3. Give combined gifts from parents or children instead of individuals.
  4. Agree with your close friends on a spending limit.

The holidays are a special time for children, too. But here, you must curb your excesses, so you can teach your children lessons on spending. Remember, you don’t have to give children every gift they want.

  1. When they make a holiday list, have them prioritize the things they want.
  2. Don’t forget, favored toys are often simple toys that allow them to use their imagination.
  3. Show your children there is more to the holidays than simply receiving presents.
  4. Have them participate in choosing and wrapping presents for a less fortunate child.
  5. Encourage them to make their own gifts for families and friends.
  6. Arrange family outings and fun activities, so the holidays become a series of joyful events.

 

Here are some things to remember:

  • Set a budget (credit cards should be paid off in 90 days)
  • Save on gifts (buy one nice gift instead of multiple small gifts)
  • Make or bake gifts instead of buying them
  • Give combined gifts from parents or children
  • Teach your children how to participate in the holidays (have them choose or wrap gifts for a less fortunate child)
  • Have children make their own gifts for family or friends

Tax Tips for Holidays

Holiday Meal Deductions are worth 100% deductions (2018 and later)

It’s that time of the year when the spirit of giving is at its hilt. The holiday season of spreading joy and good cheer is here and this is the best time to discuss some little known or used tax deductions that are available for the business owner during the holiday season.

Typically, if an employer or owner of a small business takes employees out to lunch, or pays for a gift like a birthday, graduation, wedding, anniversary, baptism, or bar (bat) mitzvah, then there is only a 50% tax deduction for the cost of the meal, entertainment and/or gift. 

So, if an employer/owner purchases a small HOLIDAY gift such as a turkey, ham, or bottle of wine, half of the costs of the purchase is allowed. The only things that need to be proven to receive this 100% tax deduction, are the date, place, purpose and dollar amount spent. This will allow the company or business owner the opportunity to write off the deduction at 100%. 

The IRS does not define what holidays are allowed for this deduction. So, whether you are Christian, Muslim, Jewish, or belong to any other faith, you should be able to justify a holiday meal at 100% deduction for a business that is paying for it. You are eligible to benefit from it if you are self- employed, with employees, or own a corporation and you are an employee as well.

Here are some things to remember:

  • Holiday meals are fully deductible (100% write off)
  • Small holiday gifts that are given are deductible to the employer or business owner (ham, turkey, wine)
  • The documentation that is required to claim the total deduction is the date, purpose of meal or gift, place of meal or gift and the dollar amount

 

Call today, don’t delay! See how this affects you. We can be reached at 602-264-9331 and on all social media under azmoneyguy.
Be more prepared for this year’s tax season! Get your copy of Bob’s NEW book, 52 Ways to Outsmart the IRS, Weekly Tax Tips to Save You Money on Amazon, Kindle, or at Azmoneyguy.com (available in paperback and eBook).

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Tax and Financial Advice from an expert

Mr. Hockensmith has been a guest newscaster for national and local TV stations in Phoenix since 1995, broadcasting financial and tax topics to the general pubic. He has written tax and accounting articles for both national and local newspapers and professional journals. He has been a public speaker nationally and locally on tax, accounting, financial planning and economics since 1992. He was a Disaster Reservist at the Federal Emergency Management Agency, for many years after his military service. He served as a Colonel with the US Army, retiring from military service after 36 years in 2008. Early in his accounting career, he was a Accountant and Consultant with Arthur Andersen CPA’s and Ernst & Young CPA’s.

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