Did you know,
through the recently passed CARES Act, there have been some changes that expands the amount of charitable giving you can deduct from your taxes? We understand the importance of making every donated dollar count and we are here to ensure that you have the most updated information about something as important as tax-deductible donations!
You have the incredible opportunity to provide more clean water to the people in the Central African Republic like never before. Here is how it works:
ADDITIONAL DEDUCTION AVAILABLE: You can now deduct an additional $300 per taxpayer in annual charitable contributions. This is available only to those 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.
REQUIRED MINIMUM DISTRIBUTIONS WAIVED IN 2020 FOR MOST DONORS: Required minimum distributions 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.
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 annual gross income (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 Water for Good. The old deduction rules apply to gifts to private foundations. The higher deduction does not apply to donations directly to a donor-advised fund.
We are excited about these CARES Act changes,
and looking forward to not only bringing more clean water to those living in the Central African Republic but also being able to continue maintenance on the 1,000+ wells in existence. We could not do this work without you.
PLEASE DO NOT HESITATE TO REACH OUT TO GREG, OUR SENIOR PHILANTHROPY OFFICER, WITH ANY QUESTIONS REGARDING THE CHANGES THE NEW CARES ACT BRINGS TO YOUR GIVING.
gjohnson@waterforgood.org
This information is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in any examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results.
