Can you deduct anonymous Secret Santa layaway gifts on your taxes?

The big thing this Holiday season is anonymously paying off lay-away accounts at K-mart.  It works like this: go to customer service desk at K-mart (or any other store), and offer to pay someone else’s account.  If you have a soft spot for, say, children’s toys, they will help you find an appropriate recipient, within your price range.  It’s a really beautiful thing to do.

Is it tax deductible?

No.  Tax deductible gifts must be given to a qualified charity, and K-mart is no qualified charity.

That said, a church (or another qualified charity) can collect donations and then distribute them to K-mart or another retailer to pay off layaway accounts.  This project would need to be within the mission of the charity.

Don’t think you can give a “donation” to your church, have them give the money to pay off your own lay-away account, give your kids the gifts, and then write them off on your tax return.

About Mark P. Holtzman

Chair of Accounting Department at Seton Hall University. PhD from The University of Texas at Austin. Worked at Deloitte's New York Office. BSBA from Hofstra University.

No comments yet... Be the first to leave a reply!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: