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2021 CARES Act 

Porter-Gaud is grateful for your generous support of our work over the years. As we continue to face our new reality, we would like to bring to your attention to the continued tax rules for charitable giving included in the CARES Act.

The Internal Revenue Service joined with several leading nonprofit groups to highlight a special tax provision that allows more people to deduct donations to qualifying charities on their 2021 federal income tax return.

The Independent Sector and National Council of Nonprofits joined with the IRS to highlight this pandemic-related provision where married couples filing jointly can deduct up to $600 in cash donations and individual taxpayers can deduct up to $300 in donations.

Under the temporary law, taxpayers don't need to itemize deductions on their tax returns to take advantage of this, which creates tax-favorable donation options not normally available to about 90 percent of tax filers. Ordinarily, people who choose to take the standard deduction cannot claim a deduction for their charitable contributions. But this special provision permits them to claim a limited deduction on their 2021 federal income tax returns for cash contributions made to qualifying charitable organizations by year's end, December 31, 2021.

If you don’t itemize you may reduce your taxable income by $300 for your charitable contributions in 2021. 

If you do not itemize your deductions in 2021, you can still reduce your taxable income by up to $300 for contributions of cash to public charities using an “above the line” adjustment to reduce your taxable income. 

Required minimum distributions from retirement plans are again in force for 2021.

Qualified charitable distributions are still a great way if you are 70½ or older to make contributions. 

If you are 70½ or older, a qualified charitable distribution (“QCD” or “IRA charitable rollover”) allows you to make a tax-free gift of up to $100,000 to Porter-Gaud from your IRA. While the benefit of using a QCD to satisfy your required minimum distribution has been waived for 2020, a qualified charitable distribution remains a great way to make tax advantageous contributions, especially if you don’t itemize your deductions.