With the enactment of the Coronavirus Aid Relief and Economic Security Act (CARES Act), the government has provided two unique ways for individuals to make charitable contributions.
Charitable Giving in 2020 offers some one-time unique possibilities for donors of all means. Moreover, because of our current low interest rate environment, there has never been a better time to consider a structured gift to Casey Cares which can create a “win-win” for both donors and charities. Join Casey Cares for an interactive webinar on several charitable giving techniques and some one time only gifting strategies that will expire at the end of 2020. Jarrett Bostwick, Partner, General Counsel & Co-Founder of Spearhead LLC answers your questions below
For taxpayers who don’t itemize their deductions, they are now able to deduct up to $300 per year in charitable contributions provided that such deductions are made in cash and are made to qualified 501(c)(3) non-profit organizations.
This deduction falls within a category of deductions that are referred to as “above-the-line” deductions, and consequently, non-itemizing taxpayers do not have to file any additional schedules with their Federal Income Tax Returns (Federal Form 1040). Very simply, the deduction is taken directly against the taxpayers Adjusted Gross Income (AGI).
For taxpayers who itemize their income tax deductions, the CARES Act allows cash donations to public charities to be deducted up to 100% of the taxpayer’s AGI. This new deduction limitation is only available for taxpayers in 2020. For example, if an individual has AGI equal to $50,000, he or she may deduct up to $50,000 of cash donations made to one or more public charities, which would eliminate all of his or her income tax liability.
We wanted to pass this information along to you, in hopes that it would assist you in your 2020 giving strategy. You should not use this information as a substitute for your own judgment, and you should consult professional advisors before making any tax, legal, financial planning or investment decisions. Please visit CaseyCares.org for more information on these new tax rules and how your donation will support our programs.