To encourage charitable giving this year, the CARES Act has created a number of tax incentives, including a universal deduction of $300 for cash charitable contributions in 2020. You can claim this deduction on your tax return next year without itemizing. This means you can reduce your taxable income up to $300 on your 2020 taxes.
The adjusted gross income (AGI) has been waived for 2020, allowing those who itemize to deduct contributions up to 100% of AGI. And any unused contribution deductions on your 2020 taxes can be carried forward up to five years. For businesses, the new law also increases the limit on the deduction for cash charitable contributions from 10% to 25% of a corporation’s taxable income.
Required minimum distributions from an IRA for 2020 have been waived. However, if you are 70 ½ or older, you can still make a qualified charitable distribution up to $100,000 from your IRA to a public charity such as the Council on Aging of Central Oregon. A qualified charitable distribution would normally help satisfy your required minimum distribution but even though this is waived for 2020, it may still be an excellent way to give, especially if you do not itemize.
Please check with the IRS or your tax advisor to find out more.