2021 Tax Incentives for Charitable Giving

With the passage of the CARES Act, the federal government has incentivized charitable giving to organizations like Reynolda. The following changes may be important for you to consider as you think about your charitable giving this year.

Significant charitable giving incentives in the CARES Act have been extended through 2021. Taxpayers taking the standard deduction can claim a deduction of up to $300 (new for 2021, couples who are married and filing jointly can claim a deduction of up to $600) for cash contributions to charitable organizations like Reynolda.

Typically, individuals can take a charitable deduction of up to 60% of their adjusted gross income (AGI) for cash gifts to charities. In 2021, the CARES Act allows individuals to deduct cash gifts up to 100% of their 2020 AGI. Deduction amounts above this limit may be carried over for up to five tax years.

You can make a gift online at reynolda.org/support.

  • Gifts of appreciated publicly traded stock

For those who itemize deductions, considering the strong market performance this year, contributions of appreciated publicly traded securities may offer significant additional tax benefits in comparison to cash donations. In addition to a fair market value charitable deduction of gifted securities, donors may avoid the capital gains tax they would trigger if they sold the securities and gifted the cash proceeds. 

  • Make an IRA Qualified Charitable Distribution (QCD)

Minimum Required Distributions are back in 2021. While QCD contributions are not eligible for a tax deduction, individuals age 70½ and older can direct up to $100,000 per year from their Individual Retirement Accounts (IRAs) and avoid paying tax on the distribution. QCD donations will not count toward any deduction limits on charitable giving. For more information on making a QCD from your IRA, please contact your IRA plan Administrator.

If you have any questions or would like more information about making a gift to Reynolda, please contact us by email at advancement@reynolda.org.

As always, we encourage you to contact your tax adviser to determine if the changes noted above would be advantageous for you.