Help wild Alaska while saving on your taxes
The Coronavirus Aid, Relief and Economic Security (CARES) Act signed into law in March includes several provisions that incentivize charitable giving in ways that decrease your tax liability.
As you consider your own tax situation and consider how you can help protect Alaska’s iconic wildlife and landscapes — now more at risk than ever — we thought you might appreciate some of these potential incentives to give to the cause.
New charitable deduction available for taxpayers not itemizing
Even if you do not itemize your taxes (or are still unsure of your tax plans), you can still deduct up to $300 of your charitable donations for 2020. This means that if you donate up to $300 to public charities like Alaska Wilderness League, you will be able to reduce your adjusted gross income and still claim the standard deduction in 2020. Even better, this is a benefit that could continue beyond 2020, so setting up monthly donations with the charities you care about most could be an easy way to guarantee meeting that $300 threshold each year.
Cap on charitable giving raised
If you choose to itemize your deductions, you can now deduct charitable donations equaling your entire adjusted gross income. Previously, this amount was capped at 60% of your total income. For 2020, this could enable those of you who have the capacity to give large donations to deduct their full amount and potentially reduce your tax liability significantly, even to zero depending on how much you give.
One item to note: this adjustment is only for donations to 501(c)3 public charities like Alaska Wilderness League, and not those made to private foundations or donor-advised funds (the latter of which were excluded from the CARES Act).
Mandatory retirement distributions lifted
The primary goal of the CARES Act was to provide relief to the millions of Americans facing financial burdens due to the coronavirus pandemic. This includes populations living on fixed or limited incomes, such as retirees. Fortunately, the mandatory distribution mandate for retirement accounts has been waived for the year 2020, allowing these accounts to recover. Looking ahead, these accounts can still be tax-wise options for giving once recovered.
If you have any questions about the above provisions, I’m here to help! You can reach me at Chris@AlaskaWild.org or 202-266-0415.
The information contained herein is offered for general informational and educational purposes. The figures cited in the examples and illustrations are accurate at the time of writing and are based on federal law as well as IRS discount rates that change monthly. State law may affect the results illustrated. You should seek the advice of an attorney for applicability to your own situation.