What does the CARES act allow regarding charitable contributions?
The CARES Act (Coronavirus Aid, Relief, and Economic Security Act) allows for several provisions regarding charitable contributions. Some of the key features include:
1. Universal Charitable Deduction: The Act introduces a new above-the-line deduction of up to $300 for individuals who take the standard deduction. This means that even if you do not itemize your deductions, you can claim this deduction on your 2020 tax return.
2. Increased Limit for Itemized Deductions: For those who itemize their deductions, the Act lifts the existing limits on charitable contributions, allowing individuals to deduct up to 100% of their adjusted gross income (AGI) for cash donations made to certain qualified charitable organizations in 2020. Normally, the limit is 60% of AGI.
3. Corporate Charitable Contributions: The limit on corporate deductions for charitable contributions has also been increased. Corporations can now deduct up to 25% of their taxable income for cash donations made to qualified charitable organizations in 2020 (up from the previous limit of 10% of taxable income).
These provisions aim to encourage charitable giving during the COVID-19 pandemic by providing tax benefits to individuals and corporations who make contributions to qualified charitable organizations.
The CARES Act, also known as the Coronavirus Aid, Relief, and Economic Security Act, provides some provisions related to charitable contributions. Specifically, it introduces a temporary change to the deduction limit for cash contributions made to qualifying charitable organizations. Here's how you can find more details about what the CARES Act allows regarding charitable contributions:
1. Start by conducting an internet search: Go to a search engine like Google or Bing and type in "CARES Act charitable contributions" or a similar keyword phrase. This will provide you with a list of relevant sources to explore.
2. Research official government websites: Look for reliable sources such as official government websites like the Internal Revenue Service (IRS) or the official CARES Act website. Government websites are likely to have the most accurate and up-to-date information.
3. Review IRS publications: The IRS provides detailed information and publications that explain the tax-related aspects of the CARES Act. Check the IRS website and look for publications related to charitable contributions, such as Publication 526 (Charitable Contributions).
4. Consult tax professionals or advisors: If you are uncertain about the information you find or need personalized advice, it's best to consult a tax professional or advisor. They can provide specific guidance based on your individual circumstances.
Remember, the information related to the CARES Act and charitable contributions may be subject to change, so it's important to stay updated with the latest sources and consult professionals when necessary.
The CARES Act, which was signed into law by President Trump on March 27, 2020, has introduced several provisions regarding charitable contributions. Here are some of the key points:
1. Universal Deduction for Non-Itemizers: The CARES Act allows individuals who do not itemize their deductions to claim a charitable deduction of up to $300 in cash contributions made to qualifying organizations in 2020. This deduction is available to both single and married taxpayers.
2. Increased Deduction Limit: For those who itemize their deductions, the CARES Act increases the maximum limit for cash contributions to qualifying charities. Previously, the limit was set at 60% of adjusted gross income (AGI), but it has been raised to 100% of AGI for 2020. This means that taxpayers can potentially offset their entire AGI with charitable deductions.
3. Exclusion of Required Minimum Distributions (RMDs): The CARES Act suspends required minimum distributions from retirement accounts for 2020. However, if individuals aged 70½ or older still wish to make charitable contributions, they can do so directly from their IRA. These qualified charitable distributions (QCDs) will not be counted as taxable income, providing a tax benefit.
It's worth noting that the rules surrounding charitable contributions can be complex, and it's always recommended to consult with a tax professional or advisor for specific guidance based on your individual circumstances.