Taxes

New limits on IRAs lead to other opportunities, incentives

The Secure Act, passed in December 2019, made some changes to IRAs that were not beneficial to those people hoping to pass their IRAs down to their heirs in a tax-efficient manner. But the CARES Act, passed in March of this year, has brought some new opportunities.

The option to stretch distributions from an IRA over a beneficiary’s lifetime (and therefore accrue tax-free income inside the trust for a longer period) was effectively done away with for all but spouses.

Then along came COVID-19 and the never-before-seen hit to the economy.

But things aren’t all bad. The Cares Act, passed by Congress in late March 2020, presents some tax planning incentives and opportunities, ranging from the simple to the more complex with greater benefits.

Charitable deductions

Taxpayers who do not itemize their deductions can now add an additional $300 deduction for donations of cash to public charities to the standard deduction, thanks to a provision in the Cares Act. And you’d rather give your money to charity than the government, right? This provision applies to 2020 and years thereafter.

Additionally, for 2020 there is no cap on the deductibility of cash contributions to charities. Thus, you can donate up to 100% of your adjusted gross income (vs. 60% previously) and receive a deduction of the full amount. For corporations, the charitable deduction limit of 10% of taxable income is raised to 25%.

Read the full story at The Press Enterprise.
Up Next

How pro athletes are empowering female and minority entrepreneurs

Read Now
Editor's note: Stories appearing on NCF's website from third-party contributors are intended for informational purposes only, and we do not endorse or approve the content, services, products, or theological teachings they contain. Any questions or concerns may be directed to the original publisher of such third-party content.

Sign up for our
Saturday 7 email digest

Join 40,000+ subscribers who receive our email digest of the
week's top stories from ncfgiving.com. We call it Saturday 7.

Read our privacy policy

×