CARES Benefits for Causes that Matter
With the last few months of the year on the horizon, you may find yourself reflecting on all that has happened in the previous year (or two). I have found myself reflecting on how much has happened in our community and how we can continue to support our local community during these challenging times. With these thoughts in mind, take some time to learn about the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Created in 2020, this legislation produced several provisions to help individuals and businesses who give to charity. These benefits were extended by The Consolidated Appropriations Act of 2021 and are still available for donors to employ. While caring is always the first impulse in giving, CARES Act legislation may make giving easier in ways not considered previously. No matter what amount you typically give, here is what you need to know:
- Individuals, including married individuals filing separate returns, can claim a deduction of up to $300 for cash contributions made to qualifying charities during 2021. The maximum deduction increased to $600 for married individuals filing joint returns*. The IRS reports that nearly nine in 10 taxpayers now take the standard deduction and potentially qualify to claim a limited deduction for cash contributions. This donation can be an easy way to support the endowments of more than 100 different non-profit organizations at the Community Foundation.
- Suppose you itemize on Schedule A of your tax return. In that case, your charitable cash deductions are generally limited to 60% of your adjusted gross income (AGI) are now expanded to a 100% AGI limitation for this year*. If you are looking to rebalance underperforming investments in your investment portfolio, selling some stock and making a charitable cash gift may be advantageous. This contribution can be a great way to create your legacy to support Lorain County.
- If you’re planning a large donation in 2021, between the ages of 59½ and 70½, and are not dependent on existing retirement funds, don’t forget to leverage your IRA assets. Under the CARES Act, when you contribute your IRA cash to charity, you offset that income by taking a charitable deduction of up to 100% of your AGI for the tax year*. This method may effectively afford individuals over 59½ years old the benefits like a Qualified Charitable Distribution (QCD).
- Charitable deductions for corporations increased from 10% to 25% of taxable income for business owners*. Local community leaders can use this increased benefit to support the community-responsive funds at Community Foundation that offer the greatest flexibility in responding to the community’s changing needs.
* Always consult an attorney or tax professional regarding your specific legal or tax situation.
Don’t forget that many of these benefits exclude gifts to donor-advised funds. However, many giving opportunities through the Community Foundation of Lorain County are still eligible for these benefits. When combined with others in Lorain County, even a small donation will have a positive and lasting impact. Your charitable giving makes a world of difference to the causes that matter to you.
Connect with me to discuss how we can fulfill your 2021 giving plans. Also, this week is Estate Planning Awareness Week. It is estimated that over half of Americans – 56% – do not have an up-to-date estate plan! As a service to our friends and supporters, we are offering a complimentary Estate Planning Guide. Request one today to start planning (or updating) your legacy
Connect with me to discuss how we can fulfill your 2021 giving plans.