ITHACA, NY (607NewsNow) — December is the season of giving, and this year, why not consider gifts that provide long-term benefits for your loved ones and your financial future? Whether you’re thinking of helping your child save for college or planning strategic tax moves for your business, there are plenty of ways to wrap up the year with smart financial decisions.

For Individuals:

Wrap Up Your 1099s:

As the year comes to a close, it’s important to finalize any 1099 forms if you’ve worked as a contractor or hired contractors. This paperwork needs to be completed accurately, so now is the perfect time to wrap it up before tax season starts.

Contributing to a 529 Plan:

A 529 plan is a tax-advantaged savings plan designed specifically for education expenses. Contributing to a 529 plan for your child or grandchild not only sets them up for future success, but it can also provide you with state tax deductions or credits, depending on where you live. In New York, for example, contributions of up to $5,000 per individual ($10,000 for married couples filing jointly) can be deducted from your state taxes.

Gifting a 529 Plan:

If you’re looking for a meaningful holiday gift, consider contributing to a loved one’s 529 plan. The IRS allows tax-free gifts of up to $17,000 per recipient in 2024 without triggering the gift tax. It’s a perfect way to invest in your child or grandchild’s education while potentially lowering your tax burden. When compared to buying toys or items that might soon be forgotten, a 529 contribution is a gift that will truly keep on giving.

Tax Benefits of Gifting:

In addition to the educational benefits, 529 contributions offer a powerful way to reduce taxable income, especially when gifted. It’s worth consulting a tax professional to see how these contributions fit into your overall financial strategy.

For Business Owners:

Final Business Investments:

As a business owner, December is the last chance to make major investments and take advantage of tax deductions for the year. Whether you’re upgrading equipment or prepaying for business services, making these moves before December 31st can reduce your taxable income and set you up for a strong start to the new year.

New York State Tax Deductions:

In New York, certain tax-deductible items can provide substantial savings on your state tax return. From office equipment to energy-efficient property upgrades, knowing which purchases qualify can help lower your tax burden. Make sure to consult with a tax advisor to see which deductions apply to your business.

The Bottom Line:

This December, give the gift of future financial security—whether through 529 contributions or smart business investments. With tax season just around the corner, now’s the time to take advantage of opportunities that will benefit you and your loved ones in the long run.

For a more personalized tax consultation, reach out today to Sprague & Jackson. You can give us a call or visit www.sprjac.com for more information!