When you give, you get. Learn more about how you can support nonprofits working for the causes you’re passionate about—and possibly get tax benefits.
2020 has been a whirlwind, and even as nonprofits around the world have risen to the occasion—by providing healthcare to people who are displaced in Cameroon or operating mobile foodbanks—many face closure as funding dries up and needs increase. Despite tremendous struggles, people just like you are stepping up to fill the gaps and ensure that local organizations can respond to COVID-19 and other challenges facing their communities.
When the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in early 2020, it added provisions that made charitable giving easier and advantageous for Americans.
If you want to give back this year, here are three giving options that will allow you to support the causes you care deeply about and potentially take advantage of significant tax benefits before 2020 ends.*
The CARES Act effectively suspended the limit for individuals’ tax-deductible contributions in 2020. The act increased the limit on individual taxpayers’ deductions for cash contributions to public charities from 60% of an individual’s annual gross income to 100%.
Even if you don’t plan on itemizing your taxes in 2020, you can deduct up to $300 of cash contributions to charities with an above-the-line deduction thanks to the CARES Act. This means the amount of your contributions will be subtracted from your taxable income.
If you decide that this giving method is right for you but aren’t sure which nonprofit to support, GlobalGiving Gift Cards are a great place to start! When you purchase a gift card, you will receive a tax receipt and may be eligible for a tax benefit. Then you’ll have the flexibility to choose a nonprofit you care about when it’s convenient for you.
The stock market saw record gains in 2020. If you experienced increased value (and increased capital gains tax) this year, you might want to make your annual charitable contributions by donating stock. Many givers choose to take advantage of this tax-savvy giving method.
If you held the stock for at least one year, you receive a tax deduction for the full value of the stock at the time of donation (not just the amount you paid for the stock), and you avoid paying both capital gains tax and stock sales commissions. As a result, you can give your favorite nonprofits larger gifts by donating stock rather than cash.
3. Qualified Charitable Distributions
If you are 70.5 years or older, Qualified Charitable Distributions (QCD) could be the most tax-efficient way for you to give.
Even though the CARES Act eliminated the Required Minimum Distribution that mandates traditional individual retirement account (IRA) holders to remove funds from their accounts this year, giving through your IRA could still be the smartest giving option. Your donation will be deducted and won’t be considered taxable income—effectively lowering your taxes. Unless you are making a donation via a QCD, money withdrawn from your IRA will be considered annual income and taxed. Giving by QCD may also lower your future Required Minimum Distributions.
Want to make a QCD gift to GlobalGiving? The process can be easier if you start your forms online through our partnership with FreeWill, or by reaching out directly to your IRA contact.
Even if you aren’t able to give this year, you can plan to give and help your loved ones at the same time—without paying a dime today.
Creating your will and defining a charitable plan helps your loved ones understand your wishes and continues your legacy by supporting the causes and nonprofits that are important to you.
Learn more about how planning can help you give to trusted nonprofits around the world (and get tax benefits).
*Like everyone at GlobalGiving, our lawyers are thankful that you took the time to visit GlobalGiving.org. Our lawyers also wanted you to know that GlobalGiving does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only and is not intended to provide and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors for advice on tax matters.
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