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CARES Act Expands Charitable Giving Provisions
As we navigate these challenging times, all of us at the Western Pennsylvania Conservancy sincerely hope that you and your loved ones stay healthy and safe.
It’s important to remember that while we can’t spend time with those we love, nature can always provide some much-needed solace and a breath of fresh air from the stresses surrounding us.
The Conservancy is making every effort to stay mission-focused at this time. Fortunately, the Coronavirus Aid, Relief and Economic Security (CARES) Act brings some new benefits for individuals and corporations who want to provide much-needed support to charitable organizations.
If you take the standard deduction on your 2020 tax return, you may claim an "above-the-line" deduction of up to $300 per taxpayer for cash donations to nonprofits. The measure applies to gifts to qualified charities, such as WPC, but does not include gifts made from a donor advised charitable fund or gifts of stock.
If you itemize your deductions for 2020, you may now take charitable deductions equal to up to 100% of your Adjusted Gross Income. The amount you can deduct for cash contributions is generally capped at 60% of AGI. For business owners, the 10% limit has been increased to 25%. This measure applies to cash gifts to public charities and is not applicable to gifts from private foundations or donor advised funds.
The new law temporarily suspends the requirements for required minimum distributions (RMD) for the 2020 tax year. Many of our donors use their RMD to make a gift from their IRA. Despite the RMD suspension, remember that if you are 70½ or older, you can still make a gift from your IRA.
Below are some reasons why a gift from your IRA may be a good idea:
- Your gift will be put to use today, allowing you to see the difference your donation is making.
- You pay no income taxes on the gift. The transfer generates neither taxable income nor a tax deduction, so you benefit even if you do not itemize your deductions.
- Since the gift doesn’t count as income, it can reduce your annual income level. This may help lower your Medicare premiums and decrease the amount of Social Security that is subject to tax.
If John and Nancy had an adjusted gross income of $100,000 and gave $100,000 cash to charity, they could previously only offset $60,000 of their income. This year, because of the CARES Act, they can offset the full amount of their AGI, and therefore their entire $100,000 donation can be deducted and will offset their income for 2020.
In these uncertain times, we hope you find peace of mind and comfort in nature. Stay safe, stay healthy, and know that we are thinking of you. If you are able, please think of us as well.
If you would like to speak to someone about making a donation to the Western Pennsylvania Conservancy, please contact Julie Holmes, director of development, at 412-586-2312 or email@example.com.