As 2020 comes to a close, here are a few reminders from the CARES Act as you consider making a gift:
- If you plan to take the standard deduction (do not itemize) on your 2020 taxes and make a gift to a ministry, you may be allowed an above-the-line income tax charitable deduction of up to $300 ($600 for a married couple) to reduce your tax liability. This is an added benefit for anyone taking the standard deduction.
- If you do itemize for 2020, the deduction limit has increased to up to 100% of your annual income for cash gifts. Previously the deduction was capped at 60% of annual income. That means you may be able to deduct more this year than last year. NOTE: Contributions to a donor-advised fund (DAF) do not qualify for the enhanced benefits under the CARES Act.
- Impact to Retirement Accounts
- Required minimum distributions (RMDs) from Individual Retirement Accounts (IRAs), including qualified retirement plans, are waived for 2020.
- IRA account holders 70 ½ or older are still able to make qualified charitable donations (QCDs) of up to $100,000.
Thank you for considering a donation to The Alliance. Every gift makes a difference as we seek to bring All of Jesus to All the World, together. And with these potential tax savings, you may be able to have even more Kingdom impact this year!
This information is offered as an educational service. It is not offering professional tax, legal, or accounting advice. For specific advice about the effect of any planning concept on your tax or financial situation or with your estate, please consult a qualified professional advisor.