Thinking About Your Year-End Giving? The CARES Act can help!
We have much for which to be grateful this holiday season. The children at DCCH are healthy and doing well, despite the pandemic. You, our cherished supporters, have stepped up during this difficult time to help us reach our goals with your time, talent, and treasure. And the CARES Act provided funding to help bridge the gap due to decreases in our outpatient therapy and foster care programs.
Here’s how the CARES Act can make year-end giving work for you!
The CARES Act increased the adjusted gross income (AGI) limit for cash contributions for individual donors. For 2020, donors can elect to deduct up to 100% of their AGI if gifts are made with cash, as compared to 60% in other years. Corporate donors can deduct up to 25% of taxable income in 2020, increased from 10% in other years.
The CARES Act makes a new charitable deduction available to individual taxpayers who do not itemize their deductions. This new benefit, also referred to as a universal deduction, allows for a charitable deduction of up to $300 per individual in 2020.
QUALIFIED CHARITABLE DISTRIBUTIONS
The CARES Act did not change the rules around Qualified Charitable Deductions (QCDs), which allow individuals over 70 ½ years old to donate up to $100,000 in IRA assets directly to a charity annually without taking the distribution into taxable income.
A charitable gift of appreciated assets is one of the most popular non-cash giving techniques. Many taxpayers may hold substantially appreciated investments that would be ideal for this purpose. With a gift of a highly appreciated asset, you can potentially avoid capital gains tax, preserve your current cash flow, and generate a charitable tax deduction.
DONOR ADVISED FUNDS
With the recent increase in the standard deduction, many donors are using donor advised funds to “bundle” charitable gifts for several years into one calendar year. This strategy allows you to exceed the standard deduction in one tax year, while using a donor advised fund to support your favorite charitable causes in the coming years.
This information does not constitute tax, legal, or accounting advice. Please consult your professional advisor.