As you consider your year-end giving, we want to ensure that you are aware of the financial benefits provided to you through this year’s CARES Act. Included in the Act are three unique giving opportunities:
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A $300 “above-the-line” charitable deduction. All taxpayers who do not itemize deductions can deduct up to $300 of cash contributions made to eligible charities. This gives a chance for everyone to get a credit for at least a portion of their charitable giving. While cash contributions are eligible, contributions to donor advised funds (DAF), donations of property, or appreciated stock do not qualify for this deduction.
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100% of adjusted gross income deduction (AGI). For individuals who itemize their deductions, the CARES Act offers a provision in tax year 2020 for individuals to deduct up to 100% of one’s AGI for eligible charitable cash contributions. (The previous deduction limit for cash gifting was 60% of AGI).
- Corporate giving deduction increased from 10% to 25%. For 2020 only, corporations can deduct up to 25% of taxable income for cash donations to charities. Similar to the other two new CARES Act benefits, only cash contributions made to eligible charities qualify for this increased corporate deduction.
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