Category: Charitable Deductions

The 2022 mid-term election has shifted the scales in Washington, D.C., with the Democrats no longer controlling both houses of Congress. While it remains to be seen if — and when — any tax-related legislation can muster the requisite bipartisan support, a review of certain provisions in existing laws may provide an indication of the many areas ripe for action in the next two years. Retirement catch-ups at risk The SECURE 2.0 Act, enacted at the tail end of 2022,… Read more ›

If your not-for-profit focuses most of its fundraising energy on donors who can contribute to your mission and programs now, you may have neglected legacy gifts. Such gifts represent a portion of wealthy donors’ estates that go to your organization on their death. Legacy gifts can help position your nonprofit for sustained growth well into the future. Let’s take a closer look at the hows and the whys. Mechanics of Giving The vast majority of legacy gifts are made through… Read more ›

Unlike some fishing enthusiasts, not-for-profits don’t usually “throw back” contributions from the small fry in its donor base. Modest donations, after all, add up. But landing some big fish can make a whale of a difference to an organization’s financial security.Unfortunately, major donors don’t usually knock on a charity’s door and hand over millions of dollars. You have to work to find them and then earn their trust and confidence. Here are seven practical suggestions: Upsize your annual fund. Your… Read more ›

Organizations that are created to provide goods or services exclusively (or primarily) to Section 501(c)(3) organizations (or governmental entities) may think that this purpose is sufficient to also qualify them under tax law. However, providing commercial-type services exclusively to exempt organizations is not by itself an exempt purpose. Much more is required for qualification under the rules of Internal Revenue Code Section 501(c)(3) than just having a mission to assist charitable organizations. Basic Requirements An exemption under tax code Section… Read more ›

  If your not-for-profit organization operates on a calendar-year tax basis, the deadline for filing your 2021 Form 990 (Form 990 EZ for certain small organizations) is right around the corner — May 15, 2022. Besides filing on time, you must ensure the information provided on your form is accurate. Pay particular attention to the following eight issues that commonly trip up nonprofits: 1. Unrelated business income tax (UBIT). If your not-for-profit regularly engages in activities that generate profits, for… Read more ›

  For charitable donors, the Tax Cuts and Jobs Act (TCJA) provided some tax breaks and took away others. Here’s what charity-minded individuals need to know. Increased Charitable Deduction Limit Under prior law, deductions for cash contributions to public charities and certain private foundations were limited to 50% of your adjusted gross income (AGI). The TCJA, which passed in December of 2017, increased the deductible limit to 60% of AGI for the 2018-2025 tax years. Deductions that are disallowed by… Read more ›

If reducing your taxable estate is an important estate planning goal, making lifetime charitable donations can help achieve that goal and benefit your favorite organizations. In addition, by making donations during your lifetime, rather than at death, you can claim income tax deductions. But some of your charitable deductions could be denied if you don’t follow IRS rules. 3 things to be aware of First, the recipient charity must be a qualified charitable organization: It must have a tax-exempt status. The IRS… Read more ›