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Ask HN: Do you or someone you know give money to your parents?

• nikivi 4y ago
  30-40 % of my income goes to my parents. I pay tax on it first before sending.
  • gnicholas 4y ago
    Just FYI, if you're in the US there may be additional taxes owed. I assume that when you say you pay tax on it before sending you mean income tax, not gift tax (which goes up to 40%). IIRC (it's been a while since law school), you actually have to gross up the gift amount to pay for the taxes, which then results in more taxes and more grossing up. Gifting money and paying the gift tax alongside it is a very expensive endeavor. If you're based outside the US, rules may differ.
    • nikivi 4y ago
      Not in US and in Spain. Thanks for heads up though.
  • sshine 4y ago
    Why so much?
    • nikivi 4y ago
      I don’t earn a lot. And both my parents don’t work currently. And have smaller brother and sister too.
• DenisM 4y ago
  From the horse’s mouth: https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes https://www.irs.gov/businesses/small-businesses-self-employe... TLDR: - gifts are not tax deductible. - gifts are taxable but only if above $17k per person. - gifts for medical expenses are excluded from taxation. I’m not a financial professional, this is not a financial advice.
  • thejteam 4y ago
    Also not a professional, but to elaborate this means if you plan on giving your parents (with emphasis on the plural) 30k that means you can give each of them 15k (write 2 separate checks) and you come in under the 17k per person mark. Then you don't even have to file the gift form (I think it is 709...) and pay no tax.
    • toomuchtodo 4y ago
      This also means if your parents have medical expenses, pay those expenses directly to exclude those gifts from your personal annual exemptions.
    • lotsofpulp 4y ago
      > Then you don't even have to file the gift form (I think it is 709...) and pay no tax. You do not have to pay a tax anyway until you give away a total of $13M in your life, excluding any amounts you gifted that were less than $17k or less per person per calendar year.
  • denimnerd42 4y ago
    Right so he should give 15k to his mom and 15k to his dad with separate checks or cash. If he is married they can give double without adding it to their return. There is also more info like a lifetime tax free limit but adding the form to the tax return is annoying regardless and it's best to save that limit for later.
  • viknesh 4y ago
    This is pretty much wrong because it misses an important point, which is that this is only discussing the annual gift tax limits. The lifetime limits are currently 11 million, which means that the first 11 million you give will not be taxed.
• jbm 4y ago
  I did send money to my parents when I was in Japan. I found some links online, but I think the total I could send was 380k yen per parent (which is about 1/5th of what you are sending)
• RosanaAnaDana 4y ago
  I regularly 'help' my family with out of pocket purchases and expenses. I avoid giving money directly unless as cash because they prefer it that way. I also subsidize one parents rent by offering her reduced rent at a property I own. We still have a contract, but she doesn't pay the full amount I would charge other tenants. The reality for many of us who grew up in poverty and may have 'made it' to a greater or lesser extent is that our families are likely didn't. It's shocking to me how many M's and Z's don't see themselves as being responsible for their families. I find it highly disappointing.
  • bertjk 4y ago
    What do you mean by M's and Z's?
    • sinistersnare 4y ago
      Millenials and Zoomers, I assume
    • simonw 4y ago
      My guess is millennials and zoomers, see https://en.m.wikipedia.org/wiki/Millennials https://en.m.wikipedia.org/wiki/Millennials and https://en.m.wikipedia.org/wiki/Generation_Z https://en.m.wikipedia.org/wiki/Generation_Z
  • gameshot911 4y ago
    Children have a "responsibility" for their parents in the same way that a tourist has a "responsibility" to give money to those people who run up and tie a bracelet to your wrist, then demand payment. It was a unilateral action - the tourist didn't ask for it, even if they (or did not) benefit from it. "Kind"? "Nice to do"? Sure. But a responsibility? Absolutely not.
    • gkfasdfasdf 4y ago
      Children taking responsibility for elderly parents is how society has functioned for millenia. It's a good system.
• netsharc 4y ago
  How to ask a question poorly. Which tax jurisdiction? Are your parents living in the same country or a different country? https://duckduckgo.com/?q=tax+benefit+of+supporting+parents&ia=web https://duckduckgo.com/?q=tax+benefit+of+supporting+parents&... https://duckduckgo.com/?q=tax+benefit+of+supporting+overseas+parents&ia=web https://duckduckgo.com/?q=tax+benefit+of+supporting+overseas...
  • DoYOuGiveMoney 4y ago
    [flagged]
    • PaulBGD_ 4y ago
      I would recommend a local CPA, who can keep your details private and give you accurate tax advice.
    • sokoloff 4y ago
      If you’re asking for help in de-confusing the tax aspects (even casually), you pretty much have to give the country.
    • viknesh 4y ago
      Is your expectation to be given advice for every country in the world? Or is it implied that you only care about advice for the country you'll most likely receive it for (USA) in which case...why not just state that.
      • DoYOuGiveMoney 4y ago
        [flagged]
        • deleted 4y ago
          [deleted]
    • boopboopbadoop 4y ago
      Ok sure. We’ll just give you tax advice and not tell you what country it pertains to.
• torstenvl 4y ago
  My dad had an ischemic stroke a few years shy of social security eligibility. I set up a checking account he's an authorized user on, and I top it up to a few hundred dollars a month. He has a debit card and knows it'll have a balance of $x00.00 on the first of every month.
  • pengaru 4y ago
    That's kind of you, and an excellent approach, kudos.
• droctothorpe 4y ago
  I send my parents $500 a month with Venmo. Really ought to send more.
• TAForObvReasons 4y ago
  Not an accountant. If everyone involved is a US citizen, this year's gift tax exemption is $17000 per recipient. That means you can give up to $34K written as $17K checks to each parent with no fuss.
  • ghayes 4y ago
    You and your spouse can each give that amount, which doubles the number if you are married. Also if you go over, you need to file a gift tax form, but you would simply be eating into your lifetime exemption, which several million dollars before you need to pay an estate tax.
• MPSimmons 4y ago
  I pay my mom's rent.
• jxf 4y ago
  I have a joint account with my parents. I have a recurring transfer that covers their living expenses go into the account each month.
• mef 4y ago
  If you're giving $30,000 per year as a gift, you should definitely be paying for an accountant and you should ask them about what options there are for tax optimizing this. There may in your jurisdiction be nonobvious ways to structure this kind of thing that would be advantageous to both you and your parents.
• TrackerFF 4y ago
  Do you give money to your parents because they need it (i.e poverty), or because it's a cultural thing? Here in Norway, it's more or less unheard of to give money to your parents, unless they're financially screwed (in other words, debt) - but that's usually a very temporary thing. But I've worked with people from all over Asia, and many of them would regularly send money back home. Especially Indian co-workers would send significant sums back home.
  • DoYOuGiveMoney 4y ago
    I guess cultural? It's a way to make their remaining days easier and more colorful, if you will. We grew up below lower class and I say that because almost everyone I knew as "lower class" was hoarding cash and getting every benefit under the sun from the government in a major metropolitan area. We were making $1100/month and rent was $1200/month poor. As I am their age when they raised me and am in the 1% of earners for my age bracket, I would like to do what I can to make their lives a little more extravagant for my own conscience.
  • cudgy 4y ago
    Some families in India and other poor countries have pooled almost all of their assets to send a single child to a richer country and/or university. Giving back to them is a moral act of gratitude and love. Wouldn’t you do the same if Norway was a poor country and your parents did the same for you? I admire people like this, and it is a great signal of how they might potentially treat you as a friend, partner, or colleague.
  • krageon 4y ago
    I think often it's poverty or relative poverty. Your examples in Asia would probably fall under relative poverty, given that you are in Norway.
• gnicholas 4y ago
  Former (US) tax lawyer here. You can give up to the maximum allowable gift amount each year, to each of your parents. If you are married, your spouse can do the same (for your parents and their own). This year, the annual gift amount is $17,000, which means you can give up to double that ($34k), and you + spouse can give up to quadruple that ($68k) to your parents. I never worked on this type of matter directly (I was on the corporate side, not personal), but IIRC there is a form you can fill out to make one gift and have it tap both your and your spouse's gift amounts. But if you're just doing checks, you can easily make them out in four separate checks. The form is useful if you're giving them a car or painting that is below the $68k but above the individual-to-individual gift amounts. 1: https://www.morganlewis.com/pubs/2022/10/irs-announces-increased-gift-and-estate-tax-exemption-amounts-for-2023 https://www.morganlewis.com/pubs/2022/10/irs-announces-incre...
  • dragonwriter 4y ago
    > Former (US) tax lawyer here. You can give up to the maximum allowable gift amount each year, to each of your parents. Not a tax lawyer, ever, but I know the part that is missing in this statement: “without incurring any immediate or future tax liability [0] or immediate reporting requirement.” If you exceed the per-donor per-recipient limit, you have to file a gift tax return, and the gift counts against your lifetime exemption limit (currently $12.92 million, but also indexed annually by inflation.) If your total lifetime reportable gifts ever exceed that, you’ll have to pay gift tax on the reportable gifts over the limit, and if yiur estate exceeds whatever is left ofnyour exemption when you die, your estate will pay estate tax. [0] barring a future but retrospective change to tax law, which is theoretically possible but impossible to plan around.
    • gnicholas 4y ago
      I could add more and more detail, but at some point it doesn't make the comment more helpful, and there's a tradeoff in terms of readability. People are less likely to read super long and jargon-filled comments. Also, there's a tradeoff in writing something quickly and having it get lots of eyeballs, at a time when those eyeballs are seeing other advice that is much less correct. Lastly, I did refer to almost all of these specifics in my other comments on the page. But there is no way to include all possible detail in a comment like this, and if someone did it would not get read nearly as much. Also, retroactive changes to tax law are very disfavored at law and would undoubtedly be challenged in court.
• WXLCKNO 4y ago
  My parents gave us everything they could growing up and had very little for themselves. They're good and honest people. I gave them a secondary credit card on my account and told them to spend up to 1k per month on it. They rarely reach that level and my mom is always checking in with me to see if purchase X is ok. I have to remind her that I consider that money hers anyways, she can do what she wants with it. They can afford to live without that money but to me it's the extra that makes their life more enjoyable. They sometimes go out to restaurants (which they pretty much never did), go see shows from time to time and have gotten themselves some new clothes also which they hadn't done more than a handful of times in the last decade. I'm gonna pay for dental work they need and also vacations together with them. Not answering your actual question but I hope everyone in this thread who dreams of being able to give back to their parents is able to do so one day.
  • randomluck040 4y ago
    This is inspiring, really. I just hope that I’ll get that far before they pass.
  • irajdeep 4y ago
    This is a very wholesome content. Thanks for sharing :)
• safetybox 4y ago
  I actually take all my mom's money every month and put them in one of my accounts. Then I pay her fixed expenses and give her cash whenever she wants. She mainly spends money on yarn and LPs. After retiring, her only trouble in life is her health and her children who beg money from her. She can't refuse them, but she kept saying she doesn't want to. Eventually we agreed that I admin her money. We're planning that she moves in with me and my spouse. Cooking for her every day and removing all economic worries is the best I can give her. When she leaves Earth, she can decide who her money goes to. (I'm not on the list.)
• jaequery 4y ago
  Just make sure your parents aren't using that money for stuffs like gambling.
• Fire-Dragon-DoL 4y ago
  I would love some input on this too. I have plans for my retirement at 65 and it requires to save me a good chunk of money. I ran some simulations and if I have to pay long term care for all our parents (me + my wife), we will end up bankrupt in old age. My biggest concern remains my mother, she is frugal for the small things, but she was highly incompetent with her financial life. She started way ahead (super expensive home from parents, education), she faced a divorce and sold the home, but those money are still lasting nowdays (30 years later), but not very much. She never invested any of that and faced economical challenges to grow me and my sister. Now, back to myself, I started life with 0 money from my mother but education was fully paid (pretty common in the country I come from, since it's public education). She obviously gave me plenty growing up, but she didn't plan anything for retirement. I will of course feel the urge to help, but it's frustrating to think that given the money she had once sold the home, she could have invested those money and live without working and still own a smaller property. Essentially, I have this mixed feeling of having to care for a person that started with way more than I started with, but due to poor management, it got all wasted. I don't even know how to handle those emotions.
• krageon 4y ago
  I give money to my parents. If it is so much that tax might be an issue, I would do it in cash. With me this is (of course) not an issue.
• kojeovo 4y ago
  I send 250 bi weekly electronically - no tax implications