Thursday, May 28, 2020

How the CARES Act Benefits Charitable Giving for 2020

How the CARES Act Impacts
Charitable Giving for 2020

High Level Information

New Deduction Available: Up to $300 per taxpayer ($600 for a married couple) in annual charitable contributions. This is available only to people who take the standard deduction (for taxpayers who do not itemize their deductions). It is an “above the line” adjustment to income that will reduce a donor’s adjusted gross income (AGI), and thereby reduce taxable income. A donation to a donor advised fund (DAF) does not qualify for this new deduction. 
New Charitable Deduction Limits: As part of the bill, individuals and corporations that itemize can deduct much greater amounts of their contributions. Individuals can elect to deduct donations up to 100% of their 2020 AGI (up from 60% previously). Corporations may deduct up to 25% of taxable income, up from the previous limit of 10%.
Required Min. Distributions Waived in 2020 for Most Donors: Required minimum distributions (RMD) that would have had to start in 2020 do not have to start until 2021, including distributions from defined benefit pension plans and 457 plans. This change will dampen somewhat the incentive for a donor to make a qualified charitable distribution (QCD) from their IRA in 2020. Even so, making a QCD this year will still allow itemizers and non-itemizers alike to direct up to $100,000 from their IRA to charities in a tax efficient manner.

Details About CARES Act

The inclusion of an expanded charitable giving incentive is a critical acknowledgement by Congress that the work of nonprofits like Life Change Church Tullahoma are deemed essential services. It is the first time Congress has passed this type of giving incentive in response to disaster or national emergency. 

Here’s How it Works

New Deduction Available: The bill makes a new deduction available for up to $300 per taxpayer ($600 for a married couple) in annual charitable contributions. This is particularly beneficial to people who take the standard deduction when filing their taxes (in other words for taxpayers who do not itemize their deductions). It is calculated by subtracting the amount of the donation from your gross income. It is an “above the line” adjustment to income that will reduce your AGI, and thereby reduce taxable income.
To qualify, you would have to give a donation to a qualified charity. If you have already made your donation since Jan. 1, that contribution counts toward the $300 cap.
New Charitable Deduction Limits: Also part of the bill, individuals and corporations that itemize can deduct much greater amounts of their contributions.
Individuals can elect to deduct cash contributions, up to 100% of their 2020 adjusted gross income, on itemized 2020 tax returns. This is up from the previous limit of 60%. 
Corporations may deduct up to 25% of taxable income, up from the previous limit of 10%.
The new deduction is only for cash gifts that go to a 501c3 organization. If you give cash to, say, your private foundation, the old deduction rules apply. And while the organizations that manage DAF’s are public charities, you do not get the higher deduction for donating cash to your DAF. These new limits do not apply to gifts of appreciated stock.
If your assets are substantial enough that you can give more than your income this year, you won’t lose the deduction for the excess amount. You can use it next year, as has always been the case.
Required minimum distributions waived in 2020 for most donors: RMD for individuals over age 70 ½ are suspended until 2021. This includes distributions from defined benefit pension plans and 457 plans. The RMD is an attractive way for donors to make a significant charitable gift directly from their IRA to a charity through a qualified charitable contribution (QCD) while avoiding taxable income. The suspension of the RMD may dampen somewhat the incentive for a donor who makes a gift from their IRA to count toward that minimum. However, the tax benefit of the QCD remains. 
The takeaway - donors directing a QCD to charity this year (up to $100,000 per individual) will still reduce their taxable IRA balance. This allows all taxpayers, itemizers and non-itemizers alike, to direct gifts from their IRA to charities in a tax efficient manner.
This information is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in any examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results.

Wednesday, May 20, 2020

Re-Opening Life Change Church Tullahoma!

Hello Life Change Tullahoma Friends and Family!


We are so excited to be re-opening Life Change Tullahoma! Pastor Christian Watts and his wife Kelleye have prepared a special video message for you! To view the video CLICK HERE.

It is very important that you know what to expect as we begin re-opening LCCT. We strongly encourage you to visit our Campus Re-Opening web page by clicking HERE. 

We are working very hard to prepare our campus to be a safe and clean environment. As a part of this effort, we are asking everyone (adults and children) that are planning to attend worship at 414 Wilson Avenue this Sunday, May 24th @ 10:00 to pre-register. To pre-register please click HERE.

If you do not plan to join us physically at 414 Wilson Avenue, but do plan to watch online, you can pre-register by clicking HERE.

Youth Group for those in grades 6-12 began meeting again last Wednesday evening. Please note that Youth Group is ON FOR TONIGHT and will continue meeting on Wednesday evenings at 6:00 unless otherwise posted. 

Last but not least, this Friday at 7:30 @ Life Change Tullahoma is movie night! We will be showing the movie "Courageous". This is a B.Y.O.S. (Bring Your Own Snacks) event. LCCT will supply drinks. ALL ATTENDEES MUST REGISTER TO ATTEND THIS EVENT! Register now by clicking HERE.

Have a super evening! Can't wait to see many of you again soon!!

Your LCCT Staff

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