4 Smart Ways to Support Pacific Students in 2020
Benefits of the CARES Act
While this year has been full of challenges, it also presents unique and time-sensitive tax incentives that could benefit both you and Pacific’s students.
In March 2020, the United States Congress passed the CARES Act (Coronavirus Aid, Relief and Economic Security Act) to support Americans through the COVID-19 pandemic. In addition to providing economic relief to individuals and businesses, the Act also contains provisions that impact charitable giving options for individuals like you with an interest in supporting Pacific and our students. Since some of these benefits will sunset on December 31, 2020, we are highlighting four key charitable giving incentives and how they might benefit you this year:
1. Deduct $300 without itemizing
You can deduct $300 of charitable gifts without itemizing. The $300 deduction is limited to one per tax filing unit (i.e., married couples filing jointly don’t get $600), and the gifts must be cash.
2. Deduct up to 100% of your income
For those who do itemize their deductions, the new law allows for cash contributions to qualified charities such as Pacific to be deducted up to 100% of your adjusted gross income for the 2020 calendar year. (If you already have a multi-year charitable plan or pledge, donating it all this year might make sense).
3. Give stock instead of cash
Donating appreciated assets creates two tax benefits. First, the tax deduction is the same size as a gift of cash if the asset has been owned for longer than one year. Second, you avoid paying the capital gains tax that would have been generated by selling. With stocks near record highs, this year could be a great time to give.
4. Are you 70 ½ or older? Give from your IRA.
Donors who are 70½ or older can make a Qualified Charitable Distribution (QCD) of up to $100,000 directly from an IRA to a charity. The gift comes from pre-tax dollars that are never included in your income. Even better – gifts from IRAs will count toward your Required Minimum Distribution (RMD). (Note: the age for RMDs was recently raised to 72, and this year only RMDs have been waived).
If you have questions about any of the information above, we recommend discussing options with your professional advisor or contacting our Office of Estate and Gift Planning at firstname.lastname@example.org or 209.946.2294 to discuss how you can help support students today.