Tax Free Family Gifts

Give a family you know a tax-free gift.Family portrait of young family on picnic image by YURY MARYUNIN from Fotolia.com

Every day, needy families face the challenges of paying for food, transportation, electricity and other essentials. There are a variety of ways you can help meet the needs of a family that is struggling. Consider giving the family a tax-free gift. Such donations can be channeled through non-profit organizations, such as your local church, mosque or synagogue. Build your gift around the needs of the family you wish to help. Aside from the satisfaction of helping someone in need, you also will receive a tax write-off for the amount of your gift.

Charitable Donation

Churches are allowed to give "love gifts" to people in need. The Internal Revenue Service allows this as long as the church follows specific accounting rules. To fund a love gift, contact the pastor of the church. Make sure the church is registered as an official 501(c)(3), the government's official classification for charitable entities. The church then can disperse a cash gift or specific items to the family you wish to help.

Purchase gifts during "tax-free holidays." There are many states that offer tax-free holidays at different times of the year. For example, if you live in Florida, you can buy new items for the family you wish to help during the state's annual "Back to School Sales Tax Holiday." It provides for three days of tax-free shopping from August 13 through August 15, 2010. During this time, you can purchase tax-free school supplies, shoes, clothing and books. North Carolina offers a tax-free holiday for washing machines, ceiling fans and air conditioners. Check the state tax-free holiday list on the Federation of Tax Administrators website, for specific tax-free holidays in your state, and purchase a tax-free gift that would benefit the family you wish to help.

Donate your car to a charitable organization, and you can provide a family with a needed gift while receiving a potentially substantial tax credit for your charitable donation. However, unlike the previous donation conduits described in this article, you may not be able to decide whether or not your car goes to a specific family. This will depend on the rules set by the organization to which you donate the vehicle; for example, the Salvation Army. You will need to talk with a representative before donating your car if you want make sure that your car will be given to a specific family.

You may also wish to consider giving a needy family gently used clothing and other secondhand items that still appear to be in great shape. Be selective when choosing your secondhand gifts. Also, consider purchasing used items at yard sales. Do not give a family a secondhand gift that looks worn. Make sure your gift appears more like a treasure than trash. Again, in addition to the satisfaction of helping someone, you can deduct the value of your charitable donation to the needy family on your income tax return.