Now that the holidays are here, you're probably looking around for the right gifts for your loved ones.
Of course, as you know, it's not always easy to find gifts that are both meaningful and useful.
This year, why not add financial gifts to your shopping list?
What types of financial gifts should you consider giving?
Let's look at a few possibilities:
Contributions to Section 529 plans
If you have a child (or grandchild) who will be headed off to college in a few years, you may want to contribute to a Section 529 college savings plan.
Their earnings and withdrawals will be exempt from federal taxes as long as the money goes toward paying college costs.
You might receive additional tax benefits if you participate in your own state's plan. Also, you can contribute extremely large amounts to your savings plan.
Plus, you can change beneficiaries; if you've been putting money in a Section 529 plan for your child or grandchild, and he or she decides to forego college, you can transfer the money to another family member.
Contributions to an IRA
If your loved one has an IRA, consider making a contribution. Many people don't fully fund their IRA each year -- so any help you can give toward that goal will be important.
Consider giving shares of a company that produces products or services that are used by your intended recipient.
If you're going to give some of your own shares, you'll need to know what you originally paid for the stock, how long you've held it and its fair market value at the date of the gift.
Recipients of your gift will need this information to determine gains or losses, if they decide to sell the stock.
You'll also need to determine if you have to pay gift taxes. You can give up to $12,000 per year, free of gift taxes, to as many people as you want; over your lifetime, you can give up to $1 million without incurring gift taxes.
They may sound old-fashioned and stodgy, but U.S. savings bonds can still make nice financial gifts, especially for young people who can use the money in the future.
Among the most popular savings bonds are Series EE bonds, which can be purchased in denominations ranging from $50 (or $25 for electronic EE bonds) to $10,000.
Paper EE bonds are sold at half their face amount and will increase in value until they are cashed in or reach final maturity in 30 years.
Electronic EE bonds are sold at face value and reach maturity immediately.
You can learn more about Series EE bonds, or even purchase them directly, from the Treasury Department's Web site devoted to savings bonds: www.savingsbonds.gov.
A financial gift may not be traditional, but it can have a big impact on the recipient's life -- and it won't be forgotten after the holidays are over.
Ross Hage is a licensed financial adviser with the firm of Edward Jones. For more information, call him at 468-2281.