YEAR END GIVING TIPS
As we enter the giving season, we would be honored to help you achieve maximum impact on youth and families with a year-end gift to Sherman Lake YMCA!
Itemized Deductions
The CARES Act increased the adjusted gross income (AGI) limit for cash contributions for individual donors. For 2020, donors can elect to deduct up to 100% of their AGI, as compared to 60% in other years. Corporate donors can deduct up to 25% of taxable income in 2020, increased from 10% in other years.
Universal Deduction
The CARES Act makes it possible for everyone to deduct…which means taxpayers can take this universal deduction of up to $300 per individual (or couple if you are married filing jointly). No matter whether you itemize or take the standard deduction, you can still deduct up to $300 in charitable donations from your taxable income in 2020 in addition to your standard deduction.
Qualified Charitable Distributions
The CARES Act did not change the rules around Qualified Charitable Deductions (QCDs), which allow individuals over 70 1/2 years old to donate up to $100,000 in IRA assets directly to a charity annually without taking the distribution into taxable income. However, because the CARES Act permits donors to elect to deduct 100% of their AGI for cash charitable contributions this year, this effectively provides donors over 59 1/2 years old benefits similar to a QCD by taking a cash distribution from their IRA, contributing the cash to charity, and completely offsetting tax attributable to the distribution by taking a charitable deduction up to 100% of their AGI for this tax year.
Donor Advised Funds
With the recent increase in the standard deduction, many donors are using donor advised funds to “bundle” charitable gifts for several years into one calendar year. This strategy allows you to exceed the standard deduction in one tax year, while using a donor advised fund to support Sherman Lake YMCA and your other favorite charitable causes in the coming years.
Appreciated Assets
A charitable gift of appreciated assets is one of the most popular non-cash giving techniques. Many taxpayers have substantially-appreciated investments that would be ideal for this purpose. With a gift of a highly appreciated asset, you can potentially avoid capital gains tax, preserve your current cash flow, and generate a charitable tax deduction.
Qualified Charitable Distributions
If you are age 70 1/2 or older, you can donate up to $100,000 per year directly from your IRA to the Sherman Lake YMCA. By using your pre-tax IRA assets, your charitable gifts cost you less. In addition, IRA Charitable Rollover Gifts can be used to meet your required minimum distribution and are not subject to income taxes.
Important Dates
Gifts of Stock - gifts of stock must be received before 3:00pm on December 31 to qualify as a 2020 tax deduction. Please contact our Community Development Director, Carrie Hybels, for transfer instructions at carrieh@ymcasl.org.
Gifts of Mutual Fund Shares - gifts of mutual funds should be initiated no later than December 18, 2020. Please contact our Community Development Director, Carrie Hybels, for transfer instructions at carrieh@ymcasl.org.
Gifts of Cash - checks delivered by mail must be postmarked by Thursday, December 31, 2020 to qualify as a 2020 tax deduction.
Hours - you can give 24 hours a day online at https://www.shermanlakeymca.org/donate or contact Carrie Hybels at carrieh@ymcasl.org to make special arrangements for your gift.
Determining a giving strategy is largely dependent on individual factors, such as income bracket, deductions, and personal goals. The Sherman lake YMCA does not provide legal or tax advice. Benefactors should consult with their legal or tax advisors before making charitable gifts to the Sherman Lake YMCA or any other worthy charity.