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Tax Deductions

2021 Charitable Tax Benefits

In 2020, tax benefits for charitable giving were established to encourage individuals to continue to support charities during the coronavirus pandemic. These charitable tax benefits have been extended through 2021. Below are some of the benefits to share when talking to donors about supporting your nonprofit organization this year.

  • The universal charitable deduction allows single tax filers to deduct up to $300, while couples filing jointly can deduct up to $600 for gifts made to charity.
  • The cap on annual cash contributions for those that itemize their taxes increased from 60% to 100%. This applies to both federal and state taxes. Any excess contributions available can be carried over for the next five years.

Donors age 70 ½ and older have additional options to receive tax benefits when they make a charitable contribution through their individual retirement account (IRA). Donors in this age demographic may make gifts to qualified charities up to $100,000 without having to pay income tax.

Additionally, the year a donor turns 72 they must take the required minimum distribution (RMD) from an IRA. Making a gift to a qualified charity through an IRA satisfies the donor’s RMD and can reduce annual income, which may help lower Medicare premiums and decrease the amount of Social Security subject to tax.

Educating donors about these tax benefits may yield larger gifts to support the works of your nonprofit organization.

Written by:

Melissa provides fundraising counsel for AMPERAGE’s nonprofit clients, leading feasibility studies and providing solutions that drive successful fundraising campaign results. A Certified Fund Raising Executive (CFRE), she uses her experience and extensive skill set to continually advance her fundraising practices and develop campaign-specific strategies, materials and training to help clients reach their campaign goals and advance their mission. Melissa has vast experience working in the nonprofit sector, having served in development and leadership roles with Sisters of Mercy and the Alzheimer’s Association. In addition, she has served as a volunteer and board member with local nonprofits, such as the Catherine McAuley Center. Faith-based organizations and causes are of particular interest to Melissa. Melissa moves the needle by always looking for new opportunities and ways to improve professionally. She is currently president of the Eastern Iowa Planned Giving Council and a past president of the Association of Fundraising Professionals-Eastern Iowa Chapter. Melissa holds a Master of Strategic Leadership degree from Mount Mercy University. This busy professional, wife and mother enjoys sports and live music in her free time. A fan of Cubs baseball and Iowa Hawkeye football, Melissa and family enjoy football tailgating, where she’s known for her breakfast burritos. She enjoys the local band scene but says a Foo Fighters concert is her all-time favorite.