New Tax Law and 2020 Charitable Giving
The CARES Act could influence your charitable giving decisions in 2020.
The new CARES (Coronavirus Aid, Relief, and Economic Security) Act is designed to help people, businesses, and nonprofits facing economic hardship during the coronavirus pandemic.
Here are a few key provisions of the CARES Act that may affect you and your charitable goals:
Required Minimum Distributions Suspended
The new law temporarily suspends the requirements for required minimum distributions (RMDs) for the 2020 tax year. This probably comes as a relief to many of you who would have had to withdraw from your retirement accounts. Donors may 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 or The Heat and Warmth Fund as a beneficiary.
A Gift From Your IRA is a good idea because:
- 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.
New Tax Incentives
The CARES Act allows taxpayers to take a charitable deduction of up to $300 for those who take the standard deduction. A $300 gift will have a huge impact on those we serve.
For those who do itemize their deductions, the new law allows for cash contributions to qualified charities like THAW to be deducted up to 100% of your adjusted gross income for the 2020 calendar year.
Please consult your tax advisor for answers to question on your specific situation.
We are very grateful for your continued kindness and support during this difficult time. Please contact email@example.com or contact Liz Klos at 313.348.3108 with questions.
Kroger Community Rewards
The Kroger Community Rewards Program provides financial support to THAW based on the money spent at Kroger stores by members enrolled in the program. To learn more and enroll for the 1st time or to re-enroll: Kroger Community Awards
Is a simple and automatic way for you to support THAW everytime you shop, at no cost to you.
Double Your Donation
Under the Tax Cuts and Jobs Act of 2017, the standard tax deduction has doubled both for an individual and a married couple. The increase to the standard deduction means many will use this deduction method, rather than itemizing. With these new changes, it is possible to bunch charitable donations, which is making two years’ worth of contributions in one year. This will allow for a possible higher tax benefit for your gift.
If you would like to take advantage of this new opportunity, yet you would like the contribution to be spread out evenly over that time – You have the option to create a donor-advised fund. A donor-advised fund is a dedicated charitable account used for the sole purpose of contributing to public charities and receives an immediate tax deduction.
Donor-advised funds are held by most community foundations and most financial institutions and are also held by the Archdiocese of Detroit Foundation and the Lansing Diocese Foundation.