FLORIDA ESTATE PLANNING AND PROBATE LAW BLOG: charitable giving

Showing posts with label charitable giving. Show all posts

2019 INCREASE IN CHARITABLE GIVING

♠ Posted by Marc J. Soss in 2019 charitable donations,charitable deduction,charitable giving,charity,donation,gift to charity,tax deduction

Americans gave nearly $450 billion to charity last year, which is one of the highest amounts ever recorded. This number comes as lawmakers have been looking for ways to expand tax breaks for donors amid the coronavirus pandemic. Charitable donations rose 2.4 percent in 2019 according to an annual survey by Giving USA. Individual giving accounted for about 69% of all donations, but the biggest jump came from the generosity of corporations. In 2019, businesses gave about $21 million, an increase of 11.4% from 2018. Also, giving by foundations reached a record high of $75.7 billion. "In March, lawmakers included a measure in the coronavirus economic rescue bill that allows individuals to write off as much as $300 in donations for 2020 even off they don't itemize their taxes."Typically, deductions for charitable donations are only afforded to those who itemize their tax returns or add up all of their individual tax breaks, which is only about 10% of taxpayers.

DID THE 2018 TAX LAW INCREASE MY CHARITABLE GIVING DEDUCTIONS

♠ Posted by Marc J. Soss in 2017 TAX CUTS AND JOBS ACT,charitable deduction,charitable giving,federal income tax deduction,gift to charity,state income tax deduction

When the new tax law was signed by President Trump most experts viewed it as detrimental to future charitable donations and deductions. The significantly increased standard deduction meant fewer taxpayers needed to file an itemized income tax return and non-itemizers would not benefit from a charitable tax deduction. While the value of a charitable deduction may have decreased in value for individuals that reside in states without a state income tax it has increased in value for individuals that reside in states with a state income tax. Under the new tax law, the deduction for state income taxes is limited to $10,000. While a charitable gift may not result in any reduction in state income taxes it can provide a deduction for federal income tax purposes. Utilizing a charitable gift deduction, after maximizing the amount of your state income tax deduction, can decrease the amount of federal income tax due and owing for those who do not file an itemized income tax return. In addition, under the new tax law, the donation of appreciated stocks, bonds or other assets still avoided capital gains taxes regardless of whether or not the donor itemizes. Individuals age 70 ½ or older also retained the ability to make a charitable donate directly from their IRA.

UTILIZING THE IRA CHARITABLE ROLLOVER

♠ Posted by Marc J. Soss in 2017 Federal Income Tax plan,charitable giving,estate plan,florida estate plan,IRA charitable gift,IRA charitable rollover,tax savings

Federal legislation recently made permanent an individual taxpayer ability to make charitable contributions directly from his or her IRA. These contributions are made directly from the IRA to the public charity are not taxed as income to the taxpayer subject to the following requirements: (i) individual making the contribution must be at least 70 1/2 years of age on the date of the contribution; and (ii) contributions of up to $100,000 per individual per year (or $200,000 for married taxpayers filing a joint return ). Contributions in excess of the $100,000 ($200,000) amount are treated as taxed withdrawals which are then donated to charity. Individuals over age 70 1/2 with traditional IRAs or Roth IRAs will benefit the most if they (1) have already used (either directly or via carry-over) their entire charitable deduction allowed under Section 170 of the Internal Revenue Code during the taxable year; (2) want to make charitable contributions but do not itemize deductions; or (3) have income above the applicable threshold such that deductions under Section 170 of the Internal Revenue Code are not “dollar for dollar” deductions.

TAX REPORTING OF YOUR QUALIFIED CHARITABLE DISTRIBUTION

♠ Posted by Marc J. Soss in 2017 federal gift tax exemption,charitable giving,IRA charitable gift,IRS Form 1099-R,qualified charitable distribution,required minimum distribution,tax deduction

The ability to transfer up to $100,000 each year from your IRA to charity tax-free, have it count as your Required Minimum Distribution (RMD) and have it not included in your adjusted gross income is now a permanent part of federal tax law. As a result it is important to understand how a Qualified Charitable Distribution should be reported to the IRS. The gift should be reported on IRS Form 1099-R, which you should receive from the IRA administrator. The gift should also be listed on line 15a of your Form 1040 as a gross distribution from your IRA. On line 15b, write $0 for the taxable amount (if you don’t have any taxable distributions from your IRAs for the year). Add “QCD,” for “qualified charitable distribution,” next to that line to show why the distribution is tax-free. If only part of your distribution was a QCD, put the taxable portion on line 15b and still add “QCD” to explain the difference between line 15a and 15b. It is recommended that you keep an acknowledgement of the gift from the charity in your tax files. If you do not receive one you’ll need to let the charity know to send you the receipt. Keep the 1099-R form and the acknowledgement of the gift from the charity in your tax files.