Ive seen people on tv give their game show winnings to charity, seems simple enough. What if someone wanted to give their paycheck to their old folks? How does one do that.
If the person cashes the pay check & gives them the money the person’s gonna have to pay taxes & the folks probably have to pay taxes too, right, (USA)? Can they just put the paycheck in their folks name?
You’re allowed to give a certain amount of money to relatives tax-free as gifts. So cash your check and call it a gift; the IRS won’t complain (assuming you paid taxes in the first place).
I believe the tax-free gift limit is $10,000. More than that, and you have to pay gift tax.
Your paycheck comes to you, as the person earning the money. Except between husband and wife, for whom unlimited tax-free transfer of assets may occur, any time you wish to give your money to someone else, there may be tax consequences.
The current gift tax has a $10,000 per year exception per person. So if you wish to give your “old folks” some money, you may legally give them each $10,000 per year with no tax consequences.
Gifts of more money than that require the payment of a gift tax.
Keep in mind that the whole purpose of income taxes is… well… to tax income. Allowing tax-free transfer of money between entities defeats the purpose of taxing income. Indeed, for every loophole created, there’s been an effort to plug it, which sometimes results in a greater injustice.
[hijack]A buddy of mine is in terrible trouble right now because of the AMT - the Alternative Minimum Tax - and his trouble is similar to what’s discussed here. It’s ironic that the original purpose of the AMT was to eliminate loopholes and ensure that people with high incomes paid appropriate taxes…[/hijack]
Did you need someone to volunteer as a recipient? 
aenea, sure you know someone? 
Bricker, do people on game shows give their money to charity right on the show that way? It seems Regis gives them a check with the charity name on it, not their own.
I’m not sure about the tax thing, but as far as the mechanics – once you endorse the check, it becomes anyone’s property. Subsequently, anyone that puts a 2nd endorsement on it becomes the legal owner of it. There is no limit to the number of endorsements that can exist. And no one needsto write “pay to” anywhere on the check.
IOW, if a check is made out to me, it is my money. If I sign “tdn” on the back, it’s up for grabs. If handy then signs “handy” below my name, then he can cash it.
Good point - although game show winnings are income, they are not wages. For the purposes of the celebrities who are playing for a specific charity, they’re not wage earners, and never have title to the money. They’re simply agents of the charity. Making the checks directly payable to the charity is perfectly appropriate.