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Make your giving go further in 2020
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, provides beneficial provisions that directly impact charitable giving for individuals (and corporations) in tax year 2020. Here are a few key provisions of that may affect you and your charitable goals:听
Tax Benefits for Charitable Giving
For Itemizers: The AGI limit for cash gifts to charities has increased to 100%
For the 2020 tax year, individuals may deduct cash gifts to public charities, like Boston College,听 in an amount up to 100% of their adjusted gross income (AGI). This change offers taxpayers who itemize the ability to reduce their 2020 federal income tax by making cash charitable gifts. Ordinarily, deductions would be limited to 60% of AGI.听
A taxpayer who makes the 100% of AGI election can carry forward unused qualified cash gift deductions up to 5 years. The carryforward will be subject to the normal 60% of AGI limit, as are cash deductions carried forward from past years.
The benefit does not extend to gifts made to donor advised funds (DAF) or private foundations, or split interest trusts (charitable remainder trusts, charitable lead trusts, or pooled income funds). The legislation is ambiguous regarding cash-funded charitable gift annuities.
For Non-itemizers: now eligible for $300 charitable deduction
A reduction in taxable income is available in 2020 for individuals who do not itemize their deductions. It is an 鈥渁bove-the-line鈥� deduction from taxable income for cash gifts to public charities and is limited to $300 per taxpayer. It is not available for gifts to DAFs or supporting organizations (SO) like private foundations.听听
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For Retirees: Required Minimum Distributions (RMDs) Waived in 2020
If you would normally be required to withdraw funds from your retirement plans, you do not have to take your RMD in 2020. Minimum distributions will not be required from qualified retirement plans, including IRAs, 401(k)s, 403(b)s, and most other defined contribution plans provided by an employer.听听
This one-year RMD waiver does NOT change the av