Here are a few key provisions of the CARES Act that may affect your charitable giving to Eastern University.
The CARES Act expands charitable giving incentives and allows taxpayers who take the standard deduction to make up to $300 of cash donations to qualified charities this year. You might think that this is a small amount and would not make a difference. But what if all of our donors gave “just” $300? Such support would have a significant impact on our Eastern community.
Note: The new deduction is not available for gifts to donor-advised funds, private foundations, charitable remainder trusts, charitable lead trusts, or pooled income funds.
Cap on Deductions Lifted*
For those who do itemize their deductions, the new law allows for cash contributions to qualified charities such as Eastern University to be deducted up to 100% of your adjusted gross income (AGI) for the 2020 calendar year. Previously the cap was 60% of AGI.
This adjustment may be attractive to donors who wish to make a large cash donation.
Note: The new deduction is not available for gifts to donor advised funds, private foundations, charitable remainder trusts, charitable lead trusts, or pooled income funds.
Required Minimum Distributions Waived*:
The new law temporarily suspends the requirements for required minimum distributions (RMD) for the 2020 tax year.
Despite the RMD suspension, remember that if you are 70½ or older, you can still make a gift from your IRA.
Why a gift from your IRA may still be a good idea:
- Your gift will be put to use today, allowing you to see the difference your donation is making.
- You pay no income taxes on the gift. The transfer generates neither taxable income nor a tax deduction, so you benefit even if you do not itemize your deductions.
- Since the gift doesn’t count as income, it can reduce your annual income level. This may help lower your Medicare premiums and decrease the amount of Social Security that is subject to tax.
Changes to Corporate Giving
The CARES Act increased the cash contribution limit for corporations from 10% to 25% in 2020.
Charitable contributions in excess of 25% may be deducted for up to five years under the usual limits.
Please consult with your financial advisors to see what charitable tax benefits may be available to you as a result of your giving.
*Eastern University does not provide tax, legal or accounting advice. Please consult with your financial advisor to see what charitable tax benefits may be available to you as a result of your giving.