If you haven’t made your year-end tax-deductible charitable gifts, there’s still time. Thanks to recent law changes, 2021 is a good time for charitably inclined people to maximize their donations with tax-beneficial options, below.
Cash gifts. Last year, the U.S. Congress introduced an option to receive a tax break for donating during the pandemic, benefiting a significant majority of taxpayers who don’t itemize deductions. If you’re among that groups, you can now deduct cash gifts of up to $300 per single filer and $600 per married couple filing jointly. However, unless Congress extends the law, this opportunity ends in 2021. The gifts must be made directly to a qualifying non-profit organization like Seven Acres and can be made using electronic bank transfers, Paypal, check, and credit or debit card, among other methods. Worried that you won’t get the written notice confirming your donation? Rest easy, you won’t need proof of your gift until tax-filing season in 2022.
Another just-for-2021 benefit - those who itemize deductions can receive a much larger deduction for cash gifts—up to 100% of their adjusted gross income, compared to 60% in the past. Remember that those donations cannot be made to donor-advised funds.
Appreciated stock donations. Do you own appreciated, publicly traded shares that you’ve held for more than a year? If you donate that stock to a non-profit, you will not only avoid capital gains tax on the appreciation but also may deduct their full market value as a charitable donation. If you’re considering donating shares, time is of the essence. If you wait until December 31, it may be too late for the transfer to go through in time.
IRA asset donations. Known as a qualified charitable distribution, this giving option allows owners of traditional IRAs who are 70 and a half or older to donate up to $100,000 of their IRA account assets per year. If you’re 72 or older, the donations can apply toward your required annual distribution. While the gift won’t count as a deduction, it can help you lower your income taxes and income-based Medicare premiums.
Many choices. The above are just a few existing options. You can also give to donor advised funds or donate cryptocurrency and complex assets. Before you make your gift, check with your financial advisor on the best option for you. Ask your charity of choice about processing times, depending on the option you choose. Regardless of the source of your donation and the amount of your gift, it will serve a great need as charities seek to do more with less given the decline in charitable giving during the ongoing pandemic.
At Seven Acres, your tax-deductible donation makes a direct impact on the lives of our residents. We rely on your help to ensure every senior and individual is well cared for. An investment in Seven Acres is a commitment to honor the generation that paved the way before us and to embrace the Fifth Commandment “Honor thy Father and thy Mother.” Learn more about ways you can support our shared mission: https://www.sevenacres.org/donate.
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