With tax season upon us, the VMRC Foundation offers these reminders and updates. Tax law continues to change. The CARES Act adopted in 2019 still has several provisions that give you opportunities to save on taxes, while supporting your favorite organizations. As always, check with your tax advisor to evaluate how this may affect you personally.
1 – You can continue to take a charitable deduction of up to $300 even if you don’t itemize. If you normally take the higher standard deduction, you can still take the $300 charitable deduction. For married couples, that’s up to $600 (for 2020, it’s only $300 per return).
2 – Cash contribution limitations are lifted for itemizers who give to public charities. Prior to 2020, deductible gifts to public charities were limited to 60% of Adjusted Gross Income. In 2020 & 2021, you can gift up to 100% of your Adjusted Gross Income. That means you could donate enough this year to “wipe out your entire tax bill,” according to Cari Weston, director for tax practice and ethics at the American Institute of CPAs.
3 - Using the Qualified Charitable Distributions (GCDs) from your IRA for 2021 could save you on taxes. If you are age 70 ½ you can make direct payments to your favorite organizations. For 2021, it may make sense for you to make your charitable gifts using the QCD process. You may give up to $100,000 from your IRA directly to charity in 2021.
4 – Donor Advised Funds (DAFs) are an exceptionally good way to support your favorite organizations. If you own one of these funds you can put more money into your DAF, then support your charitable organizations as you understand their needs and want to help out.
5 – Appreciated stocks/property are an excellent vehicle for reducing taxes while supporting your charitable interests. This is especially helpful for real property and stocks you’ve held for over a year.
Taking advantage of these opportunities saves you taxes and gives you more money to support the things you love. Please consult with your tax or financial advisor before utilizing any of these IRS tools.
If you wish to explore these opportunities or include VMRC in your will, feel free to explore the opportunities here or contact Les Helmuth, CFRE, Executive Director of the VMRC Foundation at 540-564-6556 or via email at email@example.com.