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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 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 Maryland Association 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 Taxes on earnings within the plan are deferred and when money is withdrawn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 and 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.

Only CPAs are equipped to address your full range of financial needs with integrity and insight. In Maryland, CPAs must pass a rigorous two-day examination, adhere to strict ethical and professional standards, and, beyond college, complete 80 hours of continuing education every two years to be certified by the state — accountants do not.

Your doctor is certified; your lawyer is certified. Make sure your accountant is a certified public accountant.

For CPA referrals in your area, contact the MACPA at (410) 296-6250 or click here.

The Maryland Association of Certified Public Accountants (MACPA) is a statewide professional association that provides leadership, information and services for its nearly 10,000 CPA members, who are employed in private practice, industry, government and education. CPAs are business and financial professionals who have passed a rigorous two-day examination in order to be licensed by the state. CPAs are committed to protecting the public interest, and must adhere to stringent ethical and professional standards and continuing professional education requirements.