This has been an extraordinary year. In recent months, the entire Poet Family has dug deep, embraced new ways of doing things, and adapted in real time to constantly changing circumstances. We have greatly relied on generous gifts from alumni, parents, friends, staff, faculty, and foundations, to continue providing the personal Poet experience our students expect from us.
As you look for ways to help those in need, you should be aware of several changes in tax law that make it easy to support our Poets and maximize your tax deductions before December 31, 2020.
In March, the U.S. Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which provided new and expanded tax incentives for charitable giving to qualified 501(c)(3) organizations, such as Whittier College. I am sharing this information in case you have not seen it. Here are some things to consider for charitable giving in 2020.
As always, please consult your tax advisor/attorney for advice on your specific situation and to determine the best giving strategy for your individual circumstances.
Thank you for lending a hand in need and for keeping Whittier students in your thoughts. We are humbled and proud at the outpouring of support from our Poet alumni, parents, and friends.
Are you itemizing your tax deductions?
Deduct cash gifts for up to 100% of your adjusted gross income (AGI). For tax year 2020 only, you may be able to deduct gifts of cash to charity to offset up to 100% of your AGI. This was increased from 60%. The gift may be for any charitable purpose (including higher education) and is not limited to gifts for Coronavirus relief.
Not itemizing?
If you are one of the 90% of taxpayers who take the standard deduction, you may now deduct up to $300 for cash gifts and get a tax break for your generosity.
Are you heading up a corporation?
With a charitable gift in support of Whittier students, your corporation could deduct up to 25% of its taxable income. Previously this limit was 10%. This is an amazing opportunity for your business to magnify the impact on the communities you serve during this critical time.
How about charitable distributions (rollovers) from your IRA?
The CARES Act did not change the rules around the Qualified Charitable Distribution (QCD). If you are over age 70½, you may still wish to use your IRA funds to donate up to $100,000 in IRA assets directly to a qualified charity each year and you will not need to recognize the transfer as taxable income on your tax return. This is a wonderful way to make a difference for Whittier students and avoid additional taxable income, which may allow you to avoid taxation at a higher tax bracket. The CARES Act has suspended the Required Minimum Distribution (RMD) from retirement accounts for 2020; you still have the flexibility to pull as much money as you need this year, you just aren’t required to take anything out.
