Planned Giving How Does the New CARES Act Affect You? Patrick Schmitt and Michael Kassabian

How Does the New CARES Act Affect You? By Patrick Schmitt and Michael Kassabian

The year 2020 has been one of so many questions: When will things return to normal? Do I qualify for the stimulus check? Where did I put my mask?

And, how can I be fiscally responsible while still supporting a favorite cause, like hearing and balance science? The good news is that you can do both at the same time, thanks to recent legislation. In March 2020, Congress passed the CARES Act to provide economic assistance in response to the COVID-19 pandemic. (CARES stands for Coronavirus Aid, Relief, and Economic Security.)

You may remember the stimulus aid given to qualifying Americans—but the law’s effects, and potential benefits for you, reach far beyond those checks. Here’s how to take advantage of savings as you consider end-of-year giving.

Take an additional income tax charitable deduction.

Donors who do not itemize can now deduct cash gifts (including gifts by check, credit card, or electronic funds transfer) up to $300 above the standard deduction for charitable contributions per household.

RMDs are suspended, but IRA gifts are still a smart way

to give. For people with individual retirement accounts (IRAs), there are no required minimum distributions (RMDs) this year. However, giving pre-tax funds out of your IRA will still lower your future tax burden compared with giving cash. If you’re age 70 1/2 or older, giving from your IRA is still a tax-savvy way to support your favorite causes this year!

If you’re interested in giving from your IRA to Hearing Health Foundation, we have a free tool to help you learn more, get started on your gift, or request a tax acknowledgment letter for a gift you’ve already made. Please see freewill.com/qcd/hhf.

There is an increase in the AGI limit for donors who

itemize. If you itemize on your tax bill, you can deduct cash gifts to public charities up to 100 percent (vs. 60 percent before the CARES Act) of your adjusted gross income (AGI). This deduction may be reduced by other itemized deductions, but any unused deduction can still be carried over for up to five additional years. In March 2020, Congress passed the CARES Act to provide economic assistance in response to the COVID-19 pandemic. (CARES stands for Coronavirus Aid, Relief, and Economic Security.) You may remember the stimulus aid given to qualifying Americans—but the law’s effects, and potential benefits for you, reach far beyond those checks.

The limit for cash contributions from corporations has

increased. Corporations can designate up to 25 percent (vs. 10 percent) of their taxable income in 2020 for cash gifts to public charities. And while other contributions to charities reduce this limit dollar for dollar, cash contributions that are more than the 25 percent limit can still be carried over for up to five additional years.

Please reach out to a tax adviser to understand how these changes affect your specific situation. We hope you can use this information and free resources to best support your savings, and Hearing Health Foundation, this year.

This article is provided for informational purposes only. It should not be construed or relied upon as legal or tax advice. Patrick Schmitt (far left) is a cofounder and co-CEO of FreeWill, where Michael Kassabian is a content associate. For more, see freewill.com/hhf or email development@hhf.org.

6 Ways to Make an Impact Today and Tomorrow

You can make a meaningful difference in hearing loss research. Whichever method below you choose, every gift to Hearing Health Foundation (HHF) counts.

Check or credit card gifts online or by mail are easy and immediate. For more of an impact, schedule a monthly gift that helps sustain research without interruption.

Donating appreciated stock can reduce your tax bill. You receive a charitable tax deduction for the full value of the stock, and avoid paying taxes on the stock as it appreciates.

A charitable bequest in your will can be a more substantial gift if you are unable to donate today. If you do not have a will, create one for free at freewill.com/hhf.

The De Francescos named HHF in their estate plans.

If you are in possession of life insurance policies that you no longer need, you can designate HHF as the beneficiary.

IRA distributions that begin when you turn 70 1/2 can be taxed as income, but if you choose to donate them to HHF, you avoid the penalty.

Retirement plan benefits left to heirs are more highly taxed than other assets. Make a meaningful gift to HHF instead, leaving lower-taxed assets to loved ones.

This publication is made possible through the generous support of readers like you and our advertisers. To learn more, visit hhf.org/how-to-help, email development@hhf.org, or call 212.257.6140.