Supporting philanthropic organizations is not only beneficial for our communities, it often reduces our income tax liability. The CARES Act offers several opportunities to increase the tax benefits of your charitable giving in 2020. The following two advantages apply only to cash contributions and exclude contributions made to donor advised funds (DAFs) or supporting organizations. 

Temporary benefits include:

Tax filers are allowed an “above-the-line” deduction for qualified charitable contributions of up to $300.

Qualified contributions may be deducted against 100 percent of adjusted gross income (AGI), rather than the previous limit of 60 percent for cash gifts. Deductions for gifts of appreciated assets remains capped at 30 percent of AGI.

Pause and evaluate any planned qualified charitable distributions (QCDs) from your IRA. While often a tax-savvy strategy, the IRS waiver of RMDs for 2020 likely means another approach will be more effective this year.

Bundling your charitable gifts, or making large gifts every two-to-three years may still make sense. But remember, the temporary higher deductions only apply to cash gifts and exclude donor advised funds. Don’t gift assets that have declined in value below their original purchase price. If you have assets that have declined in value below their original purchase price and want to benefit a charitable organization, sell the securities first and gift the proceeds to charity. This will allow you to capture the tax loss and possibly benefit from a higher tax deduction.