Charitable giving benefits of the federal stimulus bill

The COVID-19 federal stimulus bill includes several encouragements for charitable giving that can help all of us share generously with the charities we most care about during this critical time of need.

Beginning with 2020 tax returns, all taxpayers will be able to claim up to $300 in cash contributions to charity as an above-the-line deduction without itemizing. For example, if you’re in the 10 percent tax bracket, it would be worth $30. If you’re in the 37 percent tax bracket, it would save you $111. Be sure to save your charitable receipts to use this new deduction when you file your 2020 taxes.

The stimulus bill also includes a provision that helps to itemize individual donors and corporate givers by eliminating the percent of adjusted gross income limits for charitable deductions. For individuals, the 50 percent of adjusted gross income limit would be suspended for 2020. For corporations, the 10 percent limitation would be increased to 25 percent of taxable income. This means a greater tax savings on larger gifts.

The bill also waives the required minimum distribution rules for Individual Retirement Accounts and 401(k)s for 2020. Taxpayers who have reached the RMD age do not have to take an RMD in 2020, unless they want to. IRA Qualified Charitable Distributions are still a great way to gift, as they don’t count toward taxable income for the year. If you have an IRA and would normally take an RMD, using your IRA is still a great way to make a charitable gift.

There is great need—and opportunity—in the Quad Cities as we all work together to support the region during the COVID-19 pandemic. We are here to help you conduct your charitable giving through the Quad Cities Disaster Recovery Fund and to support other nonprofits. Please call Anne Calder at (563) 326-2840 or email her at AnneCalder@QCCommunityFoundation.org to schedule a time to connect.