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Special tax incentives for charitable giving end Dec. 31

Take advantage of IRS incentives for charitable giving before the incentives expire at the end of 2021.

As we approach the end of 2021, we wanted to be sure you know that right now is an excellent time to build on that investment. Whether you itemize deductions or not on your annual tax return, there are temporary opportunities in the tax law encouraging you to invest in our charitable organization now.

But those provisions are set to expire on December 31!

The IRS issued a special “tax tip” earlier this fall. The link to the IRS guidance appears at the end of this article. Here is the gist in plain English of the benefits meant to support your giving this year:

  • It may not make sense for you to itemize deductions every year — that is the case for many givers. But shouldn’t the tax code give some credit to your gifts? We think so, and thankfully Congress agreed, at least at the start of the pandemic. Right now, you can deduct up to $300 contributed to this ministry during 2021 — $600 if you are a married couple filing a joint return — even if you do not itemize and take the standard deduction.
  • If you itemize deductions, this is for you. Usually, your eligible gifts cannot exceed a specific fraction of your income. But for gifts in 2021, you can generally elect to claim a charitable deduction for cash donations up to 100 percent of your adjusted gross income (consult your tax professional or read the IRS update noted below for limited exceptions).
  • If you run a business, there are incentives for you, too. The deduction thresholds for cash and food donations for many businesses have temporarily increased depending on your status as a corporation, sole proprietorship, and so forth. It is definitely a benefit to explore with your accounting team.

Again, these incentives end this year, so consider taking advantage of these opportunities before December 31.

Finally, we want to share one more idea that is not in the IRS tax tips but is worth considering. You might reduce your tax bill by making a distribution from your IRA to our ministry. This can satisfy the required annual minimum distribution for taxpayers age 70½ or older, while not resulting in taxable income. It’s effectively another way to qualify for a charitable tax benefit — whether you itemize your taxes or not!

Thank you again for your continued partnership with us to deliver hope to hurting families. Our team is humbled by your generosity.

Give today!

See “Expanded tax benefits help individuals and businesses give to charity in 2021”, Sept. 28, 2021, https://www.irs.gov/newsroom/expanded-tax-benefitshelp-individuals-and-businesses-give-to-charity-in-2021.

Tent Schools International is accredited by the Evangelical Council for Financial Accountability