Year-End Charitable Planning 101: What To Know Before Giving
Author: Bruce M. Bittner
POST DATE: 10.28.20
Giving isn't just a nice thing to do, it also comes with a benefit or two, especially at year's-end. Being intentional with what you give, to whom, and when should always influence your charitable contributions, but CCHA is here to provide a little more insight as the end of the year quickly approaches.
Tax Implications
Generally, you can deduct charitable donations made from your household's taxable income, if you itemize your taxes (versus claiming the standard deduction.) This act lowers the amount you’d owe, up to a maximum of 60% of your adjusted gross income (AGI). The rules around how much to deduct change depending on income level, donation amount, and other variables. Be sure to check with the IRS or your accountant for more steerage there.
Employer Matching
Not only is your donation going to make a difference, your employer may be able to match and further magnify its impact. Check with your Human Resources department for your company policy on matching. Some larger giving organizations may offer matches on a special day of the year. A quick Google search of your state and “giving day match” is a good place to start, or ask your designated charity if they know of any matching programs to help amplify your gift into an even bigger contribution.
Avoid Charitable Scams
It's a shame to say, but more and more (especially during a pandemic), fraud is on the rise. Never give a gift to an organization with which you didn't initiate the contact — if you are contacted first, do some extensive research on the name of the individual who contacted you, the organization, reviews, etc. If you're giving online, always seek out “https” at the beginning of the URL, to ensure the site's credibility and privacy. That simple "s" in "https" signifies a secure link and confirms payment data shouldn't run as high of a risk of being compromised. Without it, you could be sending money directly to a scammer.
Take advantage of the CARES Act
If you aren't already aware, in the wake of the Coronavirus pandemic, Congress has granted their long-held wish for a universal non itemized “above the line” charitable deduction so that all taxpayers can deduct at least some of their donations.
Taxpayers who don’t itemize their taxes may now deduct up to $300 per year in charitable contributions, thanks to the CARES Act. Such deductions must be in cash (no property like old clothing), and given to a 501(c)(3) public charity. Incidentally, contributions to non-operating private foundations, support organizations, and donor advised funds do not come within the new deduction.
Have questions? Get in touch and we’ll help you navigate your year-end taxes and charitable giving goals, with ease and expertise. CCHA has extensive experience in the areas of federal, state and local taxation. Contact us with questions pertaining to any of your tax needs and we’ll walk you through options and best practices.
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