. End of year giving: Tax benefits while doing good
Foundation Happenings
“When ye reap the harvest of your land, thou shalt not wholly reap the corners of thy field, neither shalt thou gather the gleanings of thy harvest…thou shalt leave them for the poor and the stranger.” – Leviticus 19:9-10 n times of need, giving charitably truly becomes paramount. During the first four months of 2020 when the pandemic started, “donors nationwide recommended 544,000 grants (from donor advised funds) totaling $2.4 billion—an increase of 16% from the same time in 2019,” according to Kiplinger.com. Charitable giving remains a priority locally too, despite 2020’s many challenges. During our recent fiscal year ending June 30, RJF provided a total of $2.4 million in grants from scores of our DAFs and endowment funds to support our local Jewish community and nonprofits around Virginia, the U.S., and around the world. This total was an increase of $100,000 from the prior year. Thank you, RJF donors, for supporting the causes near and dear to your hearts. Now, before 2021 arrives, you may be reviewing your estate, financial, and/or tax plans. If so, please keep charitable giving in mind, since you may earn generous tax benefits when you donate. You can even leave a legacy while you’re at it. Here are some tips to get you started: Secure this Simple Tax Deduction: The Coronavirus Aid Relief and Economic Securities (CARES) Act allows for individuals who take the standard deduction in their tax returns
I By Robert Nomberg president & ceo richmond jewish foundation
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26| the Reflector| December 2020 Kislev/Tevet 5781
to include an above-the-line deduction of up to $300 for cash contributions. To use this benefit, you must donate before year-end directly to a qualified public charity or into an endowment fund with RJF to leave a legacy. Gain Benefits for Large Gifts: According to USNews.com, “In 2020, you can deduct cash gifts of up to 100% of your adjusted gross income (AGI), rather than the usual 60% limit… (to help)…people reduce their taxable income significantly in 2020, and it may also help retirees who have money to give but bump up against the income limits for the deduction.” Again, your gift must benefit a qualified public charity or fund an endow to support the charities of your choice. Double Your Tax Break: By donating appreciated stock held for over one year, you may deduct the stock’s fair market value (if you itemize) AND avoid paying long-term capital gains taxes on your profits. Create a DAF: A donor advised fund with RJF will streamline your annual charitable giving. With a DAF, you may donate appreciated assets or cash into your fund, earn immediate tax benefits, and recommend grants to any qualified charity at any future time. You can start a DAF with $5000 and it takes minutes to create. How about a tax credit? Donors receive federal and state tax deduction, as well as a state tax credit. Individual or business donors
receive a tax credit equal to 65% of the donation. T h e minimum donation amount is $500. The maxim u m donation amount for individuals and married couples is $125,000. There is no maximum limit for any business entity. Initiate a Qualified Charitable Distribution (QCD): If you are 701/2 and older, you may give up to $100,000 per year taxfree from your IRA to establish or grow an endowment fund or directly to any charity you choose, via a QCD. The gift counts toward your required minimum distribution (RMD) but isn’t included in their AGI. As USNews.com points out, RMDs are halted in 2020 due to the CARES Act, but by donating from your IRA instead of other accounts, you will reduce the amount needed for future RMDs, so it serves as an effective financial planning initiative. (Note: A QCD may take some time to process; please contact your IRA provider and RJF soon to ensure it is completed by December 31.) As always, consult with your trusted tax advisor for full details to discuss which options are the best for your personal situation.
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