NEW 2020 Charitable Deduction Incentive!
CARES Act for Nonprofits passed on Friday, March 27, ($2 trillion economic stimulus package) legislation provides immediate relief for nonprofits. The inclusion of this expanded charitable giving incentive is a critical acknowledgement by Congress that the work of nonprofits like Big Brothers Big Sisters are essential services.
Indeed, now more than ever children facing adversity need someone in their corner to defend their potential. It is the first time Congress has passed this type of giving incentive in response to disaster or national emergency.
Deduction Available: Up to $300 per taxpayer ($600 for a married couple) in annual charitable contributions. This is available only to people who take the standard deduction (for taxpayers who do not itemize their deductions). It is an "above the line" adjustment to income that will reduce a donor’s adjusted gross income (AGI), and thereby reduce taxable income. A donation to a donor advised fund (DAF) does not qualify for this new deduction.
New Charitable Deduction Limits: As part of the bill, individuals and corporations that itemize can deduct much greater amounts of their contributions. Individuals can elect to deduct donations up to 100% of their 2020 AGI (up from 60% previously). Corporations may deduct up to 25% of taxable income, up from the previous limit of 10%. The new deduction is for gifts that go to a public charity, such as Big Brothers Big Sisters. The old deduction rules apply to gifts to private foundations. The higher deduction does not apply to donations directly to a DAF.
Required Min. Distributions Waived in 2020 for Most Donors: Required minimum distributions (RMD) that would have had to start in 2020 do not have to start until 2021, including distributions from defined benefit pension plans and 457 plans. This change will dampen somewhat the incentive for a donor to make a qualified charitable distribution (QCD) from their IRA in 2020. Even so, making a QCD this year will still allow itemizers and non-itemizers alike to direct up to $100,000 from their IRA to charities in a tax efficient manner.
Facebook Birthday Fundraisers
Did you know you can use YOUR DAY to Defend Potential?
Two weeks before your birthday, Facebook will prompt you to select a non-profit for your special day! Just select "Big Brothers Big Sisters Greater Fredericksburg" from the prompt and you will help to ignite the power and promise of youth in our community.