Consider accelerating your cash contributions to take advantage of limited-time tax benefits! The Coronavirus Aid, Relief, and Economic Security (CARES) Act created a new universal deduction of up to $300 for gifts made to public charities by taxpayers who will claim the standard deduction on their 2020 Federal income tax return.
For donors who itemize, up to 100% of their Adjusted Gross Income (AGI) can be deducted for gifts made to public charities. Ask your tax or financial advisor if making a gift before December 31 can give a boost to your favorite charity and reduce your 2020 tax bill!
1.) What are the benefits of the new 2020 Tax Breaks as a donor?
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act created a temporary tax benefit for cash donations to qualifying charities in 2020—so now is the time to act! Essentially, it is a $300 “above-the-line” deduction for non-itemizers. That means that people who are not giving at massive levels or otherwise do not have more than $24,800 ($12,400 if single) in tax deductions still get a charitable deduction. If a taxpayer does have more than those amounts and is itemizing, there is no limitation on the charitable deduction where we usually have about a 60% limit. There are also temporary rules for corporations to maximize the tax impact of their giving that employers or business owners can utilize this year.
2.) How can I get started?
Reach out to your tax advisor and confirm that your favorite charity will qualify. Most charitable organizations should be eligible, but I suggest double-checking. Also, reach out to your employer to see if they have a gift matching program to supercharge your impact.
ROR-KC Advisory Board Vice Chair and MarksNelson Senior Insurance Tax Associate