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CARES Act - Deductions Extended for 2021 Taxes!
How CARES Act Positively Impacts Charitable Giving for Nonprofits
New Deduction Available: The bill makes a new deduction available for up to $300 per taxpayer ($600 for married couple) in annual charitable contributions. This is particularly beneficial to people who take the standard deduction when filing their taxes (in other words for taxpayers who do not itemize their deductions).
New Charitable Deduction Limits: Also part of the bill, individuals can elect to deduct cash contributions, up to 100% of their 2021 adjusted gross income, on itemized 2021 tax returns. This is up from the previous limit of 60%.
Corporations may deduct up to 25% of taxable income, up from previous limit of 10%.
The new deduction is only for cash gifts that go to a public charity. If you give cash to, say, your private foundation, the old deduction rules apply. These new limits do not apply to gifts of appreciated stock.
If your assets are substantial enough that you can give more than your income this year, you won't lose the deduction for the excess amount. You can use it next year, as has always been the case.
The above information is informational in nature and meant for illustration purposes. This information is not meant to replace the advice of a tax professional. Please consult your advisor to see how these rules apply to you.
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