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If you have not yet filed your 2020 income tax return, do not fret. The deadline for filing 2020 returns has been extended from April 15 to May 17, 2021.
As we complete the first quarter of 2021, key legislation has already passed that you need to be aware of as you put together your charitable gifts and plans for the rest of the year. There is a promise of more to come, so stay tuned! Here is what we know now:
- Make sure you give at least $300 this year (or you and your spouse give at least $600).
- Cash gifts may be a very good idea.
- Consider making charitable gifts through your business.
The American Rescue Plan Act provided a variety of measures to address the ongoing economic challenges associated with the COVID-19 pandemic.
- The first is the continuation of the universal charitable deduction. This “above the line” deduction does not compete with the standard deduction and allows an individual to deduct up to $300 that is contributed to a qualified charity (or $600 for a couple filing jointly).
- Next, cash or check may be a better way to give to charities in 2021, as a larger portion could be deductible compared to gifts of stock or other property.
- Finally, if you own a business, consider making some of your charitable contributions through it, as a larger portion of the gift could be deductible in 2021.
This may be only the tip of the iceberg, as more legislation affecting charitable planning has been proposed. Watch this blog and other business and tax planning sources for updates.
Please note, this information is not to be considered legal advice. We encourage you to talk to your tax or financial advisor about these topics. If you need legal services, please contact Indiana Legal Services or call 1-844-243-8570 Monday through Friday, 10:00 a.m. to 2:00 p.m.
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