Here are three good reasons you should make a contribution to Forward Together before December 31st.
First, the federal CARES Act increases the federal income tax deduction for charitable donations.
- For individual donors who itemize deductions, the adjusted gross income (AGI) limit for cash contributions has been increased. You can now deduct up to 100% of your AGI (up from 60%) for 2020 cash contributions. This makes cash contributions fully tax-deductible.
- For individual donors not itemizing deductions, the CARES Act allows for an additional, “above-the-line” deduction for charitable cash gifts of up to $300. You can claim this new deduction if you are not itemizing on your 2020 taxes.
- To qualify for these charitable giving incentives, donations must be in the form of cash (or check or credit card) gifts. Donor-advised funds do not qualify for the 100% of AGI deduction limit.
Second, several other federal laws provide additional tax benefits for charitable donations.
- Donor-advised funds. Donor-advised funds allow donors to make a charitable contribution, receive an immediate tax deduction, and recommend grants from the fund over time. There are no changes with the CARES Act to existing deductions for contributions made into a donor-advised fund. Individuals can still deduct up to 60% AGI in cash and up to 30% AGI in appreciated assets. Existing carry-over rules still apply. Suppose your 2020 donations exceed your AGI deduction limits. In that case, you may carry forward excess deductions for up to five subsequent tax years.
- IRA Qualified Charitable Distributions (QCD). Qualified Charitable Distributions are funds taken directly out of your individual retirement account (IRA) and given to an eligible charity. The CARES Act did not change the rules around QCD, which still allows individuals over 70½ years old to donate up to $100,000 annually in IRA assets directly to the charity and exclude taxable income distribution.
- Gifts of Appreciated Securities (Stock or Mutual Funds). You can gift appreciated stock or mutual funds held over one year and receive a charitable deduction for tax purposes. Forward Together is a tax-exempt institution and pays no tax or gains.
But the third and best reason to donate to Forward Together is that your contribution, no matter how large or how small, will help us “give life the shape of justice” in North Carolina.