Tax Changes for 2020

Gifts of Cash

CARES establishes a $300 “above-the-line” charitable deduction for taxpayers who do not itemize their deductions (instead they take the standard deduction on their tax returns).  Thus it is estimated 90% of taxpayers will benefit from this feature (Note: it may be possible to take a $600 deduction for taxpayers filing a joint return; more guidance on this question is being sought from the Joint Committee on Taxation in Congress).

New Increased 100% Charitable Deduction Limit for Cash Gifts

For larger donors, the deduction limit for cash gifts to eligible charities is 50%-60% of Adjusted Gross Income (AGI) (and gifts above that amount may be “carried over” to future tax years).  For the tax year 2020, gifts of cash will be deductible to 100% of your AGI (this does not include cash gifts to Donor Advised Funds or some other charitable concerns).

You Don’t Have to Take that RMD from Your IRA in 2020 (So use those funds for a Qualified Charitable Distribution!)

CARES specifically waives the requirement that you take a Required Minimum Distribution (RMD) from your IRA in 2020 if you are age 72 and older (or were already taking an RMD at age 70 ½ under the tax law prior to the SECURE Act of 2019).

So the good news is that you can use your IRA (even at age 70 ½) to support your church and charities, such as Doe River Gorge, with your Qualified Charitable Distribution (QCD).   It is easy to do with a call to your IRA Custodian as you ask them to send a QCD check to eligible charities.  This is tax-smart giving (up to $100,000 per IRA owner) as the QCD is not a taxable distribution from your IRA.

These are exciting changes. However, we encourage you to seek the advice of your tax advisor to see how these new changes may apply to you.

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