How to Give Gifts to Your Grandchildren (2024)

FAQs

What do you consider reasonable gifts to give children answer? ›

Material gifts: Toys, clothes, books, sports equipment, video games, electronic devices, and other physical objects that children can enjoy. Intangible gifts: Love, attention, support, guidance, education, and other non-material things that are essential for children's well-being and development.

Perhaps the simplest approach to gifting is to give the grandchild an outright gift. You may give each grandchild up to $16,000 a year (in 2022) without having to report the gifts. If you're married, both you and your spouse can make such gifts.

Review how much you've spent on them during the year.

According to an AARP survey, grandparents spend an average of $2,562 on their grandkids each year. You might consider how much you've already spent on your grandkids for birthdays or holidays when you figure up your Christmas budget.

Annual gifting exclusion limits

This is known as the annual exclusion. For 2023, the annual limit per recipient is $17,000 and for 2024 it's $18,000. In other words, you can give up to annual limit per grandchild without worrying about tax implications or filing a gift tax return.

What is the five gift rule? In the five gift rule, the first four gifts are pretty straightforward - something they want, something they need, something to wear and something to read. Then, the last gift is where you can really have fun. The fifth gift is something they didn't know they wanted.

The 5 Gift Rule offers a practical and thoughtful approach to Christmas gift-giving. By selecting something they want, need, wear, read, and experience, you ensure that each gift holds significance and brings joy.

Knowing how much to spend on a baby gift will first depend on your budget. No one wants you to go into debt to buy a gift. Average gifts from family members range from $50 to $200. A cousin might spend $50, while a grandma or close Aunt might aim for a higher priced gift.

On average, grandparents spend between $50 and $100 on birthday presents for each grandchild. Depending, of course, on various factors like how old the child is, finances, and how many grandkids there are in the family.

As a rule of thumb, you can give $50-$500 as a single guest, depending on your relationship to the couple. For a casual guest who might not be making a ton of money, $75 should be sufficient.

If you dive in deeper to see how this spending shakes out, you'll see that the average amount per grandchild comes to around $218. A 2021 poll by OppLoans of 1,700 grandparents also shows that spending isn't equal across the sexes. Grandfathers seemingly spend a little more on holiday gifts than grandmothers ($244 vs.

What's the best way to pass money to my grandchildren? ›

If it still doesn't feel right to hand over a large sum at the moment, you could consider a trust, and have a say in how and when the money is used. With changing family dynamics, a trust can provide further options for flexibility and control when making large cash gifts.

In my family, for example, we set a budget and go from there—and many families do the same. According to a November 2022 study, most parents are budgeting $220 for each child—with the highest budgets for 7 to 12-year-olds, though 28% of those surveyed are trying to keep it below $100.

In 2023, you could gift anyone up to $17,000 per year tax-free—this is known as the annual gift tax exclusion and is set each year by the IRS . You won't have to pay a gift tax on funds at or below this amount, and it won't add to their taxable income. This amount is per grandchild.

Annual Exclusion Gifts

For 2024, the annual exclusion amount is $18,000 for individuals and $36,000 for married couples. A couple with two children and three grandchildren would be able to make annual exclusions to each of them for a total $180,000 of tax-free gifts each year.

"Include a note to the person that shows that you've given this some thought, and that there's meaning behind it," Swann says. "If they're an avid gardener or into sports, you could say, 'Here's to your next golf game,' or 'Here's a little something to help you as you expand your garden.

The kind of gifts the friend had given to you on a similar occasion - birthday, anniversary, marriage - will also play in your mind to reciprocate with gifts more or less equivalent in value. The known taste and preference of the friend may also be considered while selecting the gift.

The gift of time

Of all the gifts parents can give their children, each expert agreed that the greatest gift is time – uninterrupted, focused, one-on-one time with mom or dad, or both.

Your gifts are the the combination of what you're naturally good at doing, and what you're innately drawn to do. They're like your unique calling card — the behaviors or personality traits that make you… you! Once you identify your core gifts, they can help you discern which careers may and may not make sense for you.