Oct 19, 2020

Take Advantage of the CARES Act

 

Did you know?
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed by Congress on March 27, 2020, will deliver over $2 trillion of economic relief from the public health and economic impacts of COVID-19. Below are a few key provisions, which may affect you and your charitable goals:

Suspension of Required Minimum Distributions
The new law temporarily suspends the requirements for required minimum distributions (RMD) for the 2020 tax year. Many of our donors use their RMD to make a gift from their IRA. Despite the RMD suspension, remember that if you are 70½ or older, you can still make a gift from your IRA or name Pratham as a beneficiary.

Why a Gift From Your IRA May Still Be a Good Idea

  • Your gift will be put to use today, allowing you to see the difference your donation is making.
  • You pay no income taxes on the gift. The transfer generates neither taxable income nor a tax deduction, so you benefit even if you do not itemize your deductions.
  • Since the gift doesn’t count as income, it can reduce your annual income level. This may help lower your Medicare premiums and decrease the amount of Social Security that is subject to tax.

 
New Tax Incentives
The CARES Act expands charitable giving incentives and allows taxpayers who take the standard deduction to make up to $300 of charitable contributions to qualified charities this year.

For those who itemize their deductions, the new law allows for up to 100% of cash contributions to qualified charities such as Pratham to be deducted from your adjusted gross income for the 2020 calendar year.