Four ways the 2021 tax code benefits those undertaking philanthropic endeavors
Are you wondering how the 2021 tax code impacts your charitable donations? According to the IRS, “Recent legislation includes several provisions to help individuals and businesses who give to charity.” Through the end of 2021, the new law offers four temporary tax changes. Learn how those changes affect your charitable donations.
Don’t itemize? No problem
Typically, you cannot deduct your charitable contributions if you take a standard deduction. The new law, however, changes this. You can now claim a limited deduction on your 2021 federal income taxes for your philanthropic endeavors.
Changes to cash donations
Previously, if you made a cash donation to a charity, you were not necessarily eligible for a deduction. That has changed, and most cash donations made to the charity do qualify.
If you do itemize, your cash donations for your philanthropic endeavors were previously limited to 60% of your adjusted gross income. Now, however, you can apply up to 100% of your adjusted gross income for the 2021 calendar year.
If you are age 72 or higher and have required minimum distributions (RMDs) from your retirement funds, you can donate up to $100,000 of cash to qualified charities of your choice and not have to declare the distribution as income.
Increase to corporate limit for charitable cash
For the year 2021, corporations can now apply 25% of taxable income for charitable cash. This is only permitted for C corporations, and the corporation must choose the limit increase for each contribution.
Donated food limits increase
If your business donates food as part of its philanthropic endeavors, then you may qualify for increased deduction limits. The food donations must be eligible for the existing enhanced deduction, and the contribution must be made in the 2021 calendar year.
Talk to a ProVise CFP® professional about your philanthropic endeavors
At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.
Are you ready to talk to a professional about building wealth to help fund your philanthropic endeavors? Contact ProVise today to schedule a complimentary consultation.