As you think about your opportunities to give before year end, I wanted to let you know about several options for U.S. citizens you may not be aware of.
You can use these options to give to almost any ministry, and although there are exceptions for some ministries, Asian Access qualifies for all of them.
And despite the pandemic we find ourselves in, Asian Access is experiencing many opportunities for expanding and accelerating its mission to develop leaders throughout Asia and beyond—such as The Last Mile project in the Middle East that I posted about last month.
Perhaps you have thought of giving to The Last Mile or other Asian Access project, but you are wondering where to get the resources. Here are three options worth your consideration.
CARES Act Provisions
When the CARES Act was passed in the spring, it included some changes to encourage giving. For example,
- Even if you don’t itemize deductions, you can claim up to $300 in gifts to qualified charities in 2020.
- If you do itemize deductions, you can deduct contributions up to 100% of your adjusted gross income (AGI) in 2020 instead of the usual 60%. That also means that if you are at least 59½, you may take a distribution of any amount from your IRA or 401k, give the same amount to a qualified charity, and avoid paying any federal income taxes on the distribution.
- Corporations can now deduct up to 25% of their taxable income for gifts made to qualified charities in 2020, an increase from 10%.
Most states have not changed their rules on these items, so you’ll need to take that into consideration before you make a gift. For more details see the CARES Act Provision page on the Asian Access website. These provisions expire on December 31, so you must act soon to take advantage of them.
IRA Charitable Rollover Contribution
If you are 70½ or older you can give directly from your Individual Retirement Account (IRA) to a qualified charity like Asian Access.
Why would you want to do this? At age 70½ you must start taking minimum distributions from your IRA. This adds to your taxable income unless it’s a Roth IRA. This could put you into a higher tax bracket.
But the IRS now allows you to make distributions to a qualified charity and count it toward your minimum distribution. You may distribute up to $100,000 per year in this way. For more information, go to the IRA Charitable Rollover page on our website.
Appreciated Securities (Stocks, Bonds, Mutual Funds)
Even if you have the cash, giving shares of appreciated securities can be to your advantage. Why does giving securities, such as stock, often make more sense than giving cash?
If you sell appreciated securities, you will pay capital gains tax on them. Capital gains is the difference between what you paid and the value when you sell. The tax on that difference is 20% for most people. You avoid that tax when you give the securities to Asian Access.
Note that this is only true for appreciated securities—those which have gone up in value since your purchase, and which you have held for at least 12 months.
But what if you like your stock and want to keep it?
Surprisingly, it can still be to your advantage to give it to Asian Access. This is only true if the stock has appreciated in value since you purchased it, you have held it for at least a year, and you don’t intend to sell it for at least another year. This is explained, with an example, on the Appreciated Securities page on the Asian Access website. That page will also tell you how you can make a gift of appreciated securities to Asian Access.
To learn more about how you can take advantage of these giving options, check with your tax adviser. The information in this blog post is not professional tax or legal advice.
I hope you find this information helpful as you consider giving for the rest of this year. Thank you in advance for your gift—tax-advantaged or not—that you can make this year for The Last Mile or any other Asian Access project.
With Joy in Christ this Advent Season,