Thinking about Year-End Giving? Don’t Miss These Special 2020 Tax Benefits

December is always a good time to think about charitable giving—particularly in 2020.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed by Congress and signed into law in March, provides special tax-saving opportunities that benefit donors in all income levels—but it expires on December 31. If you’re considering making a gift to Dartmouth, now is the best time to do it!

Here are four special tax incentives to take advantage of before the end of the year:

1. Deduct $300 in charity—even if you don't itemize

For the tax year 2020, non-itemizers—the majority of U.S. taxpayers, who file with the standard deduction—can reduce their adjusted gross income with cash gifts (that includes gifts by check or credit card) of up to $300 per individual.

When you make a gift of up to $300 to the Dartmouth College Fund or other campaign priority, you can reduce your tax bill and still keep your filing process simple.

2. Deduct up to 100% of your gross income through giving

Taxpayers who do itemize their deductions can deduct cash gifts—not pledges—to Dartmouth up to 100 percent of their adjusted gross income during the current tax year, an increase from the standard 60 percent of adjusted gross income.

If you have made a multi-year campaign pledge, you may want to accelerate your payment schedule by giving more this year to take advantage of much-greater tax savings.

3. Offset increased IRA tax liability with charity

The stock market has performed well over the past decade. If you’re a retiree, the value of your portfolio may mean that your required minimum distribution (RMD) is pushing you into a higher tax bracket. While there is no requirement for an RMD this year, if you own an IRA and are at least 70½-years-old, a qualified charitable distribution of up to $100,000 is an excellent way to support Dartmouth students while minimizing your tax hits in the future.

Unlike most withdrawals from your portfolio, a qualified charitable distribution is not counted as taxable income because it’s made directly to charity.

4. Skip the work of selling—donate assets and deduct their full value

Here’s a great way to give to Dartmouth and reduce your tax bill in any year: donate appreciated assets such as stocks, real estate, or artwork. This allows you to donate the full market value of your gift and possibly eliminate all of the capital gains tax you would have owed.

Donating appreciated assets is always preferable to selling the assets and then donating the proceeds. But don’t wait until the end of the month, particularly if you’re thinking about donating an item such as artwork. Start the giving process today.

Have questions about year-end giving? Contact the Gift Planning Office:
 

Visit Our Website

Call 800-451-4067