The Coronavirus Aid, Relief, and Economic Security (CARES) Act expands your income tax deduction for cash gifts in 2020. The CARES Act was signed into law on March 27, 2020, to help mitigate the effects of COVID-19 on the economy. The increased tax incentives for the bill only apply through December 31. If you no longer itemize your personal deductions, the recent CARES Act allows you to deduct up to $300 in cash donations to charity on your 2020 tax return, despite taking the standard deduction. Separately, if you itemize your deductions, you are now eligible to deduct donations to Doylestown Health up to 100% of your adjusted gross income (AGI) for cash contributions in 2020. This raises the prior deduction cap of 65% of AGI for cash contributions, allows especially generous donors to reduce their 2020 federal income tax to zero. Existing carry-over rules still apply, so some donors may even be able to carry over unused cash contribution deductions for up to five years.
You can make a gift directly from your IRA to Doylestown Health without having to recognize the transfer as income. To qualify, you must be at least age 70½ and the transfer must be made by your plan provider directly to Doylestown Health Foundation. The distribution is tax-free and counts toward your required minimum distribution. You can donate any amount from your IRA up to $100,000 annually, all of which will help Doylestown Health prepare for its second century of care.
Long-term appreciated securities, such as stocks, bonds, and mutual funds can be donated directly to Doylestown Health Foundation. You will receive a charitable tax deduction for the gift’s fair market value if you itemize deductions on your tax return and have owned the securities for at least one year. You will also avoid federal and state tax on the capital gains. Gifts of appreciated securities allow you to make a larger gift to Doylestown Health with assets you bought at a lower cost.
This information does not constitute legal or financial advice. Consult your financial advisor and obtain professional counsel of an attorney to assist you in making a gift in a way that will benefit the people and organizations you care most about.