CARES Act and Tax Benefits for 2020

With just a few more weeks to go in 2020, your charitable donations have the potential to make a huge impact to our youth mentoring program and will offer tax incentives through the CARES Act (Coronavirus Aid, Relief, and Economic Security Act). Don’t miss out on these potential tax saving strategies for 2020.

INDIVIDUAL TAXPAYERS

Standard deduction of $300 if you are not itemizing 2020 taxes

The CARES Act allows for an income tax deduction of charitable gifts up to $300. This is referred to as the “universal deduction.” It is an “above the line” deduction, meaning it may be subtracted from the taxpayer’s gross income before the taxpayer’s adjusted gross income (AIG) is calculated. Your gift must be in cash, be made directly to a public charity, not a donor-advised fund (DAF) or a supporting organization and made during 2020.

Up to a 100% deduction of your income if you do itemize

If you itemize deductions, you can deduct up to 100% of your adjusted gross income (AGI) for cash donations to charity. For example, a $25,000 gift to charities by Dec. 31, 2020, can reduce your AGI by $25,000. Your gift must be in cash, be made directly to a public charity, not a donor-advised fund (DAF) or a supporting organization and made during 2020.

Qualified Charitable Distributions (QCDs), you can still do this!

The CARES Act did not change the rules for QCDs. Individuals over 70 ½ years old may donate up to $100,000 in IRA assets directly to charity annually without taking the distribution into taxable income. While not deductible, QCDs are not subject to income tax.

CORPORATE TAXPAYERS

Corporations may deduct up to 25% of taxable income. This is up from the 10% limit. Your gift must be in cash and be made directly to a public charity, not a donor-advised fund (DAF) or a supporting organization and be made during 2020.

This information is educational in nature and should not be considered legal or tax advice. Please contact your tax or legal advisor to discuss tax strategies that will work best for you.

To qualify for these 2020 tax deductions:

• Mailed gifts must be postmarked by December 31, 2020

Friends of the Children-Portland
44 NE Morris St.
Portland, OR 97212

• Credit card gifts must appear on your credit card statement on or prior to December 31, 2020.

If you would like to discuss how your gift can make an impact on ending the cycles of generational poverty, please contact Kate Sacamano at ksacamano@friendspdx.org.