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.

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