Charitable Contribution Tax Law Changes….
On December 27, 2020, President Trump signed into law the Consolidated Appropriations Act, 2021. The Act included several provisions, but for charitable giving, it meant an extension of the CARES Act deductions for charitable contributions…with a few modifications:
• Non-itemizers can continue to take advantage of an above-the-line deduction for charitable contributions. For 2021, however, the limit has increased from $300 to $600 for married couples filing jointly.
• Itemizers may continue to deduct 100% of their adjusted gross income for cash gifts to qualified nonprofits.
• For corporations, the adjusted gross income limit will remain at 25% of taxable income rather than reverting to the 10% limitation.
Note: Donor advised funds and private foundations are excluded.
While it is too late to take full advantage of these changes for 2020, I am sure you all have that $10 or $50 or $150 donation that you made during 2020 even though you did not think it would be useful on your tax return. Remember to pull those together when you submit your tax workpapers to take full advantage of the savings opportunity in 2020.
Start your 2021 Charitable Giving Plan now to benefit from these tax savings!