CARES Act - Enhanced Rewards for Charitable Giving
The CARES Tax Act that passed in 2020 provided some additional potential benefits to LPIE donors. While not limited to grandparents and members of the community, these groups may stand to gain the most while helping a very worthwhile cause.
Qualified Charitable Distributions: The IRS will allow those 70 ½ or older to donate up to $100,000 from retirement accounts like IRAs and 401k’s. These qualified charitable distributions (QCDs) are not subject to income tax and provide a simple and tax-efficient way to support LPIE. Meanwhile, the tax act also waived required minimum distributions (RMDs) – the amount those 72 or older are forced to draw from their retirement accounts each year – for 2020. This year may be an excellent time to consider making a donation from your retirement account via a QCD. Your brokerage firm can help you coordinate a donation. Please contact us if you need additional support.
Higher Limit on Cash Donations: The IRS has increased the limit for deductible charitable contributions up to 100% of adjusted gross income for 2020. Retirees living on a fixed income previously may have bumped up against a limit on their deduction of 60% of adjusted gross income.
Additional Deduction: For those who take the standard deduction, rather than itemizing, the tax act provided an additional $300 deduction per taxpayer for cash donations to LPIE.
Please encourage your family and neighbors to consider a donation to LPIE before year-end and pass along these tax-saving tips. As always, please consult an accountant to confirm your eligibility.