2020 is coming to an end, and this is your last chance to donate so you can claim a tax deduction. While there are many benefits of making a gift - like helping to build an incredible community - it certainly doesn’t hurt to take advantage of the tax benefits of charitable giving, too.
Giving can save you money on your taxes!
If you itemize your deductions, you can receive a charitable contribution deduction against your income tax.
A contribution is deductible in the year it is made.
You can donate up until 11:59pm on December 31st for the contribution to be deductible on your 2020 taxes.
For 2020 only, taxpayers are able to deduct up to 100% of their adjusted gross income.
The CARES Act temporarily increased the individual adjusted gross income limit for cash contributions from 60% to 100% for the year of 2020. Click here to learn more.
You can use the IRA Charitable Rollover.
If you are over 70 1/2 years old, you can donate up to $100,000 to charity directly from your IRA or Roth IRA without having to pay taxes on the withdrawn amount.
You can avoid capital gains tax.
Depending on your situation, it sometimes makes more sense to give stocks instead of cash. If you do, you can claim a deduction for the fair market value of the stocks. If you do this, you can avoid capital gains tax.
You can take a deduction even if you don’t itemize.
If you take the standard deduction, you can deduct contributions up to $300. This is only for 2020 unless Congress extends it.
Remember to keep documentation of your contributions and contact our experts at CKEEP for free tax preparation assistance if you qualify! This blog is not intended to provide financial advice, but to give you information for consideration. Please consult a tax professional with specific questions.
Do you want to support the Bluegrass as we fight for the basic needs, education and financial stability of our neighbors? Click here to donate!