Why you should use cash when charitable giving in 2020
Charitable giving is beneficial for everybody. Not only does giving benefit the recipient, but it benefits the giver who can receive a tax deduction. Not to mention the psychological benefits of giving as well.
Charitable giving in 2020 may raise some question marks because it has been a volatile year for finances. However, the CARES Act that Congress passed in March 2020 has changed some of the charitable giving rules for this year. You will probably find that these changes are beneficial for you.
Charitable giving in 2020 (and why you should use cash)
Charitable giving involves more than giving away money. You can contribute property and assets to qualified organizations to receive a tax deduction at the end of the year. However, contributing cash has historically been more beneficial because donors get to write off a greater portion of their adjusted gross income (AGI). That is, at least until 2020.
Thanks to the CARES Act, individual taxpayers who use the standard deduction for 2020 income taxes can also deduct up to $300 on charitable contributions per taxpayer. Married couples can deduct $600.
Additionally, donors who itemize their deductions can elect to deduct up to 100% of their AGI instead of the 50% donors were previously limited to when using cash. Corporations may deduct up to 25% of taxable income, which is a significant increase from the previous corporate limit of 10%.
And remember, you must contribute your donations to a qualified charity that is registered as a 501(c)(3) organization to qualify for tax deductions.
Talk to a ProVise CFP® professional about your charitable giving strategy
At ProVise Management Group, we love to see people giving to others. Charitable giving and philanthropy help support local communities and make the world a better place. We want you to be able to contribute as you wish and to receive as many tax benefits from your gifts as possible.
At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, and personal values to help you develop a charitable giving strategy that fits within your overall financial plan. We can 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 charitable giving? Contact ProVise today to schedule a complimentary consultation.