The new CARES (Coronavirus Aid, Relief, and Economic Security) Act is designed to help you, businesses and nonprofits facing economic hardship during the coronavirus pandemic. In regards to fundraising, it encourages charitable giving from individuals and corporations by increasing tax deductions for charitable donations.
CARES Act highlights:
- All taxpayers (those who itemize and those who use standard deduction) can deduct total cash charitable contributions of up to $300 in 2020.
- Prior to the CARES Act, those who used standardized deduction could not deduct any charitable contributions.
- For donors who itemize their deductions, 100% of cash gifts in 2020 will be tax deductible.
- The CARES Act raised the amount of charitable giving deductible from 60% of the filers adjusted gross income (AGI) to 100% of AGI for qualifying cash contributions. More information can be found HERE.
- Taxpayers with a required minimum distribution (RMD) due in 2020 from certain retirement accounts may skip those RMDs this year. More information can be found HERE.
As always, please talk to a professional tax advisor for advice based upon your unique financial circumstances.
- Despite the RMD suspension, if you are 70 ½ or older, you can still make a gift to Chaminade from your IRA (other than an ongoing SEP or SIMPLE IRA). You will benefit even if you do not itemize your deductions, as the transfer does not generate taxable income or a tax deduction. In addition, the gift does not count as income and can help lower your Medicare premiums and decrease the amount of Social Security that is subject to tax. CLICK HERE to learn about planned giving and Chaminade’s Eagle Heritage Society.