You could encourage your mother to fund her IRA. As long as she has any earned income, she is eligible to invest in a traditional or Roth IRA (which does have income limits). In 2017, the IRA contribution limit is $5,500, or $6,500 for individuals 50 or older. Traditional IRA contributions may be deductible, depending on one’s income, and earnings can grow tax deferred. Taxes are due upon withdrawal and withdrawals prior to age 59½ may be subject to a 10% IRS penalty. Roth IRA contributions are not deductible, but earnings are distributed tax-free, provided an investor has had the account at least five years and doesn’t start taking withdrawals until age 59½.
You can’t contribute directly to your mother’s IRA, but you can give her money that she could use for that purpose, if she chooses. And since she has until April 17, 2018, to fully fund her IRA for the 2017 tax year, your gift now may help make it that much easier for Mom to “max out” on her account.
Help Pay Her Insurance Premiums
Consider helping Mom pay one or two months’ worth of insurance premiums. It’s possible that your mother is paying for multiple insurance policies, like life insurance and disability or long-term care insurance, so any financial help on your part would be valuable.
Help Find Her a Financial Professional
Give Mom some tips on how she can help maintain her financial independence. If she ever needed some type of long-term care, such as an extended stay in a nursing home or the services of a home health aide, the costs could be extremely high, and Medicare typically pays little of these expenses. Connect her with a financial professional, who can provide strategies for avoiding long-term care costs.
Give Charitable Donations
Give a gift to a charitable in her name to an organization your mother supports. Apart from the good feelings you’ll get by helping a charitable group, you could reap some benefits yourself if the charity has 501(c)(3) non-profit status. A gift of cash can earn you a tax deduction. For example, if you are in the 25% tax bracket, and you give $1,000 to a qualified charity, you will be able to deduct $250 from your taxes.
You can also donate appreciated assets, such as stocks, to a charity. If you give appreciated stocks you’ve held for more than one year, you can deduct the value of the securities, based on their worth when you make the gift — and neither you nor the charity will have to pay capital gains taxes on the donated investments.
Your mother has done a lot for you. This Mother’s Day, show her you appreciate her efforts.
Courtesy Edward Jones Investments-Cheryl Rebottaro, AAMS®, CRPC® Financial Advisor- Angie Schieffer, Branch Office Administrator-221 Mt Hermon Rd Ste F Scotts Valley. Tel # 831-461-9311 Email: firstname.lastname@example.org