Congress has provided several economic incentives to help address the far-reaching effects of the COVID-19 pandemic, including additional tax incentives to encourage charitable giving. As a part of the Consolidated Appropriations Act of 2021 the following charitable tax incentives have been extended for charitable gifts made in 2021:
You may offset as much as 100% if your income with cash gifts to the Brigham. For the 2021 tax year, you may deduct cash contributions to Brigham and Women's Hospital and most other public charities to offset up to 100% of your income. Ordinarily, the income tax charitable deduction for cash gifts is limited to 60% of your income. This 100% limit allows especially generous donors to reduce their federal income tax to zero. You can carry forward unused cash contribution deductions for up to five years.
It may not be the tax-wise choice to deduct up to 100% of your income. Because federal income tax rates are progressive, it is not a given that it will be to your advantage to deduct 100% of your cash contributions. Check with your financial or other advisors to determine whether the 100% deduction makes sense for your specific circumstances.
If you take the standard deduction you may reduce your taxable income by up to $300 (or $600 for married couples filing jointly). This is for cash only charitable contributions made in 2021.
Qualified charitable distributions are still a great way to make contributions if you are 70½ or older. A qualified charitable distribution (“QCD” or “IRA charitable rollover”) allows you to make a tax-free gift of up to $100,000 to the Brigham from your IRA if you are 70½ or older. A qualified charitable distribution is a great way to make tax advantageous contributions, especially if you don’t itemize your deductions.
You have important priorities for your family and loved ones, and we know that their health and financial well-being comes first. When you are ready, we will be here to help you shape a charitable gift plan that suits your needs and allows you to keep helping with our important work. Please contact Kathleen Duffy at email@example.com or call 617-424-4326 to learn about the many ways you can support the Brigham.