The federal Coronavirus Aid, Relief and Economic Security (CARES) Act, passed in March, includes provisions that will expire at the end of year and could make your charitable giving easier and more impactful.
There are three provisions for cash gifts which may reduce your tax burden and allow you to make an even greater difference and help the Waisman Center when you contribute by December 31:
- If you take the standard deduction when filing your income taxes, you may take a special deduction of up to $300 this year for qualified charitable cash gifts to nonprofits, including the Waisman Center. There is usually no charitable deduction if you take the standard deduction.
- If you itemize your deductions, this year you may deduct cash gifts to qualified charities up to 100% of your 2020 adjusted gross income. Normally, that deduction is capped at 60% of your AGI. For both this provision and the one above, gifts to donor-advised funds, supporting organizations and most private foundations are not eligible.
- Finally, while required minimum distributions from your individual retirement accounts are suspended for 2020, you can still make a qualified charitable distribution of up to $100,000 from your IRAs if you are 70½ or older. When you make this direct distribution to a nonprofit like the Waisman Center, it’s not included in your taxable income.
Contact us and your advisers. The CARES Act is several hundred pages long and includes numerous provisions that could benefit you financially. Consult your advisers about these provisions, and contact Qiang Chang, PhD at 608.263.5940 or qchang@waisman.wisc.edu if we can help you with any gift-planning opportunities.