During the current COVID-19 pandemic, vulnerable Marylanders across the state need access to free legal services more than ever. While your charitable support to MVLS is always appreciated, your generosity is vital now. When you support access to civil legal services in 2020 you may be eligible for additional tax benefits.
We have outlined below valuable information regarding recent law changes that may benefit you. Please consult a tax professional with specific questions on your tax situation.
Easier to Give Back and Get Back
To encourage more charitable giving in 2020, the recently enacted government stimulus bill, or CARES Act, can provide some additional tax relief for individuals making charitable contributions. The CARES Act provides for broad recovery aid for both individuals and industries affected by the coronavirus. In addition, it provides an additional bonus for charitable contributions in 2020.
Even if you take the standard deduction on the 2020 tax return, you can now claim a new “above the line” deduction of up to $300 for cash donations to nonprofit organizations, like MVLS. The CARES Act allows the contribution to be deducted up front from your Adjusted Gross Income. This allows every taxpayer to benefit from the contribution, not just for those who itemize. Donations made through donor advised funds are not deductible. While we all struggle with ways to give back during this challenging time, this is an easy way to help organizations providing critical services, like MVLS, and receive the tax benefit as well.
Required Distributions Suspended
The CARES Act will suspend required distributions through the rest of 2020 which allows individuals to forgo taking Required Minimum Distributions (RMDs) from IRAs or 401(k)-type plans this year. While this is not required this year, a charitable gift to MVLS from your IRA will help lower your future tax liabilities and help ensure that we can continue to offer essential legal services to those in need.
Get More When You Give
The CARES Act offers substantial changes for the Adjusted Gross Income (AGI) limits for individuals and companies for their charitable deductions on cash gifts. For individuals, charitable contributions to a public charity, like MVLS, can be deducted up to 100% of the taxpayer’s adjusted gross income, which is up from 60%. For corporations, charitable contributions can be deducted up to 25% of taxable income, which is up from 10% previously.
A Gift for the Future
If we have learned anything in these past few weeks, it’s that life takes unexpected and unanticipated turns. As we encourage our clients to do their advance planning to ensure the well-being of themselves and their families, we offer that same encouragement to the rest of our community of supporters.
During this time at home, take time to speak with your loved ones about your wishes including your healthcare directive and power of attorney documents. As you contemplate what you would want your legacy to be, consider including MVLS in your plans to ensure access to justice for generations to come.
We can’t thank you enough for standing by MVLS during this difficult time and are here to support you in your efforts to make a valuable gift to MVLS today or in the future. Thank you for your support!