The authors of the CARES Act (aka, the two-trillion dollar federal stimulus response to COVID-19) rightly recognized the desire of individuals, foundations, and businesses to support non-profit organizations in this age of economic hardship. As a result, donors can enjoy new added tax benefits for aligning their dollars with their values. Here’s how: Anyone who gives up to $300 can get an easy tax break Under the CARES Act, taxpayers can now take a deduction for up to $300 in charitable contributions made in 2020 if they don’t itemize . This is a flip from the previous rule that required itemization for a tax break. According to law firm McGuireWoods LLP, after the enactment of the 2017 Tax Act, it is estimated that more than 85% of taxpayers did not claim itemized deductions on their federal income tax returns for tax year 2019. However now, it’s easier than ever for donors to be sure of their tax savings while supporting the organizations they care about, whether they’re able to contribute $50 or $300 made during the 2020 calendar year. Wealthy donors can give in higher amounts, while saving more money in the process Individual donors who are well positioned to give generously, regardless of their income, should know that the tax code change for the year 2020 has no limit to the deductions that can be taken for charitable contributions if you itemize (list out) your contributions. Previously, you could only deduct up to a maximum of 60% of your adjusted gross income (AGI) via charitable contributions. But under the new guidelines, 100% of your donation would now be tax deductible if given to qualified organizations in 2020. If you’re able to extend your generosity in this time of unprecedented challenge, these tax incentive may be an important part of your calculus; whether you were already planning on making personal contributions to public charities, or are just getting started on your direct giving journey. Knowing everyone’s case is unique, make sure to consult with your tax advisor before getting your pen out. Tax Break for Charitable Donors
03-Nov-2020
Tax Break for Charitable Gift Donors
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