Whether you are an existing Fundholder or a first-time giver, Community Foundation of North Louisiana (CFNLA) will help you maximize the impact of your year-end giving.
THE CARES ACT INCLUDES TAX INCENTIVES FOR CONTRIBUTIONS MADE IN 2020.
Generally, only those who itemize deductions may deduct charitable contributions. In 2020, individuals not itemizing deductions may take a charitable deduction of up to $300 per individual.
For those who itemize, individuals may deduct qualified contributions of up to 100% of adjusted gross income (temporary suspension of 60% rule).
Corporations (C Corporations) can deduct qualified contributions up to 25% of taxable income.
Notably, contributions to Donor Advised Funds do not qualify for the above benefits.
USING YOUR IRA RMD TO MAKE CHARITABLE CONTRIBUTIONS
If you are 70½, you must take Required Minimum Distributions (RMDs) from your Individual Retirement Account (IRA). These “Qualified Charitable Distributions” (QCDs) may be made tax-free if directed to a nonprofit organization like CFNLA. Notably, QCDs may not be made to a Donor Advised Fund.
CONTRIBUTING TO DONOR ADVISED FUND
Donor Advised Funds (DAF) are another way to maximize year-end tax benefits. Contributing to a DAF allows you to receive a tax deduction in 2020 even if you make grants to nonprofits from that contribution in 2021 or a later year.
The Tax Cuts and Jobs Act (2017) implemented a higher standard charitable deduction threshold. To itemize deductions, an individual needs the total deduction to exceed $12,400 (up from $6,350) or $24,800 for a married couple (up from $12,700). To take advantage of higher deduction amounts, you can use a DAF to condense several years of charitable giving into one year and gain the maximum tax benefit allowed by law.
By choosing to endow a DAF, your charitable dollars will be invested and can grow tax-free, allowing you to make gifts to your favorite causes for years to come.
INTERESTED IN MAKING A CONTRIBUTION OR STARTING A FUND?
CFNLA accepts cash, securities, property, and a variety of other assets. We will work with you to make sure your contributions are received by the year’s end. To make a contribution or start a fund, contact CFNLA at 318-221-0582. For specific tax questions, please contact your personal tax advisor.