The CARES Act and a possibility for generosity
I want you to make you aware of something that many are not aware of in the midst of this pandemic. There are three important aspects of the CARES Act stimulus bill (passed March 27, 2020) that apply to individuals and families. This may provide an opportunity for you to do more than you thought possible to be generous with your funds this year.
#1: Charitable Giving Deductions
For 2020, every generous American can deduct up to $300 of charitable giving—even if you take the standard deduction and do not itemize your deductions. This can provide a direct savings on your income taxes.
#2: Charitable Giving For Those Who Itemize
If you have the ability to make special gifts during this time, and you itemize your deductions, the IRS will allow you to deduct up to 100% of your adjusted gross income when you file your 2020 tax return.
This is unprecedented—and may be a real tax-advantaged opportunity if you have financial resources that are beyond your personal needs. If your gift exceeds your income this year, the deduction is eligible to roll over for use in future years as well.
#3: IRA & the CARES Act
If your have an Individual Retirement Account and are taking Required Minimum Distributions (RMDs), the CARES Act suspends that requirement for 2020. In other words, if you do not need the income from your IRA for your living expenses you ARE NOT REQUIRED to take the minimum distribution in 2020.
As I’m sure you know, I am not a financial consultant, so please consult your tax advisor or your financial advisor before making any decisions on how to apply these opportunities.
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