Tax Strategies

There are many ways to make your gift to WBL while at the same time maximizing your tax savings. With tax laws surrounding charitable giving ever-evolving, we want to make sure you have the most current information on ways to both make an impact at WBL and reduce your tax liability.

Gifts of Cash

Gifts of cash are tax-deductible in the year the gift is made. As part of the Consolidated Appropriations Act, 2021 which was signed on December 27, 2020, certain provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act that increase incentives for charitable giving were extended through 2021. These provisions include:

“Above-the-Line” Deduction for Cash Gifts in 2021

The $300 above-the-line deduction established in 2020 for gifts of cash by a non-itemizer (excluding donor advised funds or supporting organizations) has been extended and expanded to $600 for those filing jointly for the 2021 tax year.

2. 100% Charitable Deduction Limit

The increase in the available itemized deduction for cash contributions to public charities of 60% to 100% of adjusted gross income has been extended to include the 2021 tax year.

Gifts of Long-Term Appreciated Securities

Giving a gift of long-term appreciated securities is in most cases more tax advantageous than giving cash. This is because capital gains taxes can be avoided on gifts of long-term appreciated assets. For taxpayers who will not be able to itemize deductions in a given year, gifts of long-term appreciated securities are an especially important tool in their tax reduction tool kit. Please see the examples below:

  
    Gift Amount
    Stock Basis
    Tax Savings from Avoidance of Capital Gains
        Tax Savings from Charitable Deduction
            Net Cost of Gift
  

    $1500
    $600
    $135
        $480
            $885
             
  

    $5000
    $2000
    $450
        $1600
            $2950
  

Gift Amount	Stock Basis	Tax Savings from Avoidance of Capital Gains	Tax Savings from Charitable Deduction	Net Cost of Gift
$1500	$600	$135	$480	$885
$5000	$2000	$450	$1600	$2950

*Based on 32 percent marginal tax rate and 15 percent capital gains tax rate

In other words, the cost of your gift of $1,500 may be reduced to a net cost of $885, resulting from a savings of $135 in capital gains tax and, if you are taxed at a 32 percent marginal tax rate, an additional $480 in savings from the income tax charitable deduction.

IRA Charitable Rollover Gifts

If you are 70 ½ years of age* or older you can make a qualified charitable distribution of up to $100,000 directly to WBL from a traditional Individual Retirement Account (IRA) and avoid reporting the income. To make an IRA Charitable Rollover gift to WBL, click here to see a sample letter to direct your IRA plan administrator to make a distribution from your IRA account to WBL. Then, please notify WBL to expect the QCD from your IRA and specify how you want your gift to be used.

DISCLAIMER: WBL is a charitable organization and does not provide tax, legal, or financial advice. Any document or information shared by our staff is intended to be educational. WBL strongly encourages you to seek counsel from your own legal and financial advisors. Please know that any information or documents shared by WBL cannot be used to avoid tax-related penalties.