Knowledge Center

(Don’t miss out! Some are “this-year-only” opportunities you may want to consider from the CARES Act enacted earlier this year.)

1.     Deduct $300 without itemizing

Don’t let this opportunity expire on you! This year only, you can deduct $300 of cash, check or debit/credit card charitable gifts without itemizing. The $300 limit is one per tax filing unit. So, married couples filing jointly only get to deduct $300 and not $600. Everyone should consider taking advantage of this special 2020 opportunity.

2.     Give appreciated stock or mutual fund shares

Donating appreciated assets creates TWO tax benefits. The tax deduction is the for the current market value and not your purchase price. (You have to own the shares for a year or more.) PLUS, you avoid paying capital gains tax on the shares.

You can even immediately purchase new shares in the same company or fund if you want your portfolio to “stay the same.” Your portfolio doesn’t change, but the capital gain is removed. (There is no waiting period because this is gain property and not loss property, and the “wash sale” rule doesn’t apply.)

3.     Make IRA gifts if you’re are 70½ or older

Even though IRA accounts have no required minimum distribution (RMD) in 2020, you can still make a gift directly to _______ from your IRA if you’re 70½ or older. You can give up to $100,000 each year. The benefit: This gift donates pre-tax dollars. The earned income is never taxed because it goes directly to _______ and/or your other favorite nonprofits.

4.     Make IRA gifts if you’re age 59½ to 70½ 

IRA withdrawals during this age range create no penalties, but they are taxable. However, this year only, cash gifts can be deducted up to 100% of income. If you are already itemizing deductions this can help offset the tax impact from an IRA withdrawal.

5.     Combine a Roth IRA conversion with a gift

A Roth conversion moves money form a standard IRA into a Roth IRA. The benefit: all future distributions from the Roth IRA are tax free. (Even distributions of future growth are tax free!) The downside: the money moved into the Roth IRA counts as immediate income this year.

However, this year only, up to 100% of income can be offset by charitable deductions. This includes income created by a Roth conversion. If you already have a multi-year charitable plan or pledge, donating it all this year and combining with a Roth conversion might make sense.

6.     Deduct up to 100% of your income

This year only—and unlikely of being renewed! You can deduct up to 100% of your adjusted gross income using charitable gifts of cash to an operating nonprofit such as ______. If you’ve been waiting for the opportunity to make a major gift, this could be your year.

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Remember, these are just a few ideas to discuss with your tax or other professional advisor. They may not apply in your situation.