Yesterday, President Trump signed into law the Consolidated Appropriations Act, 2021, which will provide $900 billion in coronavirus relief and $1.4 trillion to continue to fund the government. The legislation covers a lot of territory and clocks in at over 5,500 pages. Because of the delay in passage and further delay in signing, there is little time before 2020 ends for donors to ask what will be extended and what will be changed for 2021. Below is our reporting of a few key provisions in this law that will impact fundraisers and donors.
Ready or not, it’s year-end again, which leads us right into tax season – that “most wonderful time of the year!” Here is our quick review of the tax reporting process for life income gifts.
The CARES Act and 2020 Charitable Tax Benefits Legislation known as the CARES Act introduced significant incentives to stimulate charitable giving in response to the Covid-19 pandemic. Some of those important tax incentives expire on December 31, 2020. Your donors will need to act quickly to take advantage of these tax-smart ways of giving before they are gone. Listed below are the most significant provisions applicable to charitable giving included in the CARES Act.
Less is often more. With a charitable gift annuity, a donor accepting a lower charitable deduction may mean more for the donor in tax savings. That might seem counterintuitive, but a combination of an historically low discount rate and an increased standard deduction can have tax implications for a donor considering a gift annuity for your charity. For gift officers, the message is to illustrate all the tax options and let the donor and their advisor decide which alternative best suits their objectives.
No doubt about it, Planned Giving is a fascinating area to work in. it’s right at the confluence of fundraising and estate planning, incorporating knowledge about investments and sensitivity to the life cycle stages that are part of the human experience. We’re helping organizations to raise money for causes we believe in, and we’re helping individuals to make the most efficient allocations of their income and wealth. One of the central and more difficult aspects of planned giving, however, is the dependence upon a variety of tax laws that affect every type of planned gift. Today’s gift planning professionals need to know more about the American tax system than ever before.