What’s New in Making Tax Deductible Charitable Contributions

Tanya Rapacz, CFP(R) |

Taking a Charitable Deduction for Tax Year 2020 and Beyond

The recent CARES Act authorizes a tax deduction of up to $300 for charitable contributions, even for taxpayers claiming the Standard Deduction. The COVID-19 Pandemic has produced a lot of needy organizations; $300 times millions of taxpayers would equal a significant impact. 

The question of whether couples who are married and file jointly are therefore entitled to a $600 deduction was not answered explicitly in the new law, although many are interpreting it that way. We’ll keep you updated.

This benefit continues for tax years beyond 2020.  You should note that this only applies to cash donations and does not extend to contributions made to an account at a donor advised fund.

Using Your Retirement Accounts for Charitable Purposes

Also, thanks to 2019’s SECURE Act, even though the age for beginning required minimum distributions is now 72, the age at which you can begin Qualified Charitable Distributions (QCDs) from your qualified retirement accounts remains at age 70.5. QCDs are a way to make tax free distributions from your retirement accounts by requesting that the custodian send the withdrawals directly to qualified charities.

Note: Employees of Arthur Stein Financial, LLC are unable to provide tax or legal advice. Please consult your tax advisor regarding any tax implications and your attorney for legal implications. As required by the US Treasury Regulations, you should be aware that this presentation is not intended to be used and it cannot be used for the purposes of avoiding penalties under federal tax laws.