December 03, 2020
New Charitable Rules Incentivize Generosity During COVID-19
- Tax Benefits
Source: Forbes | Repost Fight for Life Foundation 12/3/2020 –
The authors of the CARES Act (aka, the two-trillion dollar federal stimulus-response to COVID-19) rightly recognized the desire of individuals, foundations, and businesses to support non-profit organizations in this age of economic hardship. As a result, donors can enjoy new added tax benefits for aligning their dollars with their values right now. Here’s how:
Wealthy donors can give in higher amounts, while saving more money in the process.
Individual donors who are well-positioned to give generously, regardless of their income, should know about this tax code change for the year 2020: according to Section 2205 there is now no limit to the deductions you can take for charitable contributions if you itemize (list out) your contributions. Previously, you could only deduct up to a maximum of 60% of your adjusted gross income (AGI) via charitable contributions. But under the new guidelines, 100% of your donation would now be tax-deductible, meaning if your taxable income is $500,000 in 2020, and you give away $500,000 to qualified organizations in 2020, you won’t have to pay taxes on your income.