RSE Foundation Donations, Possible Tax Deductions

Donating to The RSE Foundation in 2020

The CARES Act of 2020 may offer some tax advantages to our donors. Please consider these aspects when donating. Be sure to consult your tax professional to confirm their applicability to your specific situation.

Taxpayers Taking The Standard Deduction

The CARES Act of 2020 has a provision that you should consider as you are planning year-end charitable gifts. Previously, charitable contributions could only be deducted if taxpayers itemized their deductions. However, taxpayers who take the standard deduction may additionally take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations. Additional information is available via this link to the IRS website:  https://www.irs.gov/newsroom/how-the-cares-act-changes-deducting-charitable-contributions 

Taxpayers Subject To Required Mandatory Distribution (RMD)

Required Mandatory Distributions (RMDs) from an IRA or similar instrument were also affected by the CARES Act: RMDs are waived for 2020. https://www.irs.gov/newsroom/irs-deadline-to-return-distributions-to-retirement-accounts-is-aug-31#

Some situations may still make it desirable to take an IRA distribution in 2020.  For instance, if you want to donate more than $300 to The RSE Foundation (or any other qualified charity) while minimizing your tax obligation, you may want to consider a direct distribution to that charity from your IRA. Whereas a normal distribution to the IRA owner is taxed as ordinary income, a Qualified Charitable Distribution (QCD) direct to the RSE Foundation (or any other qualified charity) is not considered income to the owner and is not taxed. QCDs don’t require that you itemize, which due to the recent tax law changes, means you may decide to take advantage of the higher standard deduction, but still use a QCD for charitable giving. Additional information on QCDs is available via:  https://www.fidelity.com/building-savings/learn-about-iras/required-minimum-distributions/qcds

Please consult your tax professional to determine how these regulations apply to your specific situation.