If you’re considering a charitable gift, don’t miss out on the special incentives afforded by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which expire December 31, 2020. There are several giving strategies that may benefit you:
- Individual donors may deduct gifts to Starlight to offset as much as 100% of Adjusted Gross Income (AGI).Ordinarily, the income tax charitable deduction for cash gifts is limited to 60% of your AGI. This allows especially generous donors to reduce their 2020 federal income tax to zero!
- Corporations may deduct up to 25% of their taxable income for cash contributions to 501(c)3 public nonprofits. This is an increase from the previous 10% limit.
- Even if you don’t itemize and instead take the standard deduction, you may still reduce your taxable income by up to $300 per person / $600 per married couple (filing separately) for cash donations made to public charities. This above-the-line adjustment reduces the AGI and, therefore, the amount of taxable income.
Starlight recommends consulting with your tax, legal and accounting advisors before initiating any transaction.