2021 is a great time to give due to the Consolidated Appropriations Act!
An extension of the 2020 CARES Act, this new act provides great tax benefits for charitable giving!
- To help encourage charitable giving, this act changes the charity contribution rules. It increases the adjusted gross income (AGI) limitation for cash gifts to public charities to 100% of AGI (formerly 60%).
- This high deduction limit will enable individual taxpayers who itemize their deductions to deduct cash gifts that they make to public charities to the extent of their AGI.
- It permits a $300 or $600 above-the-line charitable deduction for individuals using the standard deduction. Meaning, a taxpayer who takes the standard deduction and makes cash gifts to public charities can claim an above-the-line deduction of $300 ($600 married filing jointly) this year.
- Limitations- The 60% limitation remains in effect for cash gifts to donor advised funds. Other charitable deduction AGI limitations for individuals are unchanged (i.e., gifts of stock to public charity are still subject to 30% AGI limitation etc.).