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Charitable Giving 2021

The CARES Act, born out of the COVID-19 pandemic, included a number of provisions that might impact your charitable giving. The Consolidated Appropriations Act, 2021, has extended some of those provisions.

☑ Deduction Available in 2021
A charitable deduction of up to $300 per taxpayer ($600 permitted for joint filers) is available when you make a charitable gift in 2021 and take the standard deduction when filing your taxes. This deduction is an "above the line" adjustment to income, reducing your adjusted gross income (AGI) and taxable income.

A few items to note about your charitable gift(s):

» Must be cash;

» Must be made to a public charity – cannot go to a donor advised fund (DAF) or private foundation; and

» can be given anytime, from January 1, 2021 through December 31, 2021.

☑ 2021 Deduction Limits
For individuals itemizing deductions, the CARES Act allows you to deduct up to 100% of your 2021 AGI – a significant increase from the usual 60%. The new deduction is only for cash gifts to a public charity and does not apply to gifts of appreciated stock, to DAFs or private foundations (previous deduction rules for DAF and private foundation gifts still apply). If your charitable gifts are more than your 2021 income, the excess amount can still be deducted in 2022, as always, but back at the 60% limitation.

☑ Corporations can deduct 25% of taxable income for cash gifts to public charities, up from the usual 10%. Additionally, the deduction limit for food inventory gifts by any trade or business is increased from 15% to 25% of taxable income.