Max Out Your End-of-Year Tax Breaks

The CARES Act’s extended deadline offers Scripps supporters more ways to save on taxes

Has the market been good to you lately? Perhaps you're holding some highly appreciated stock — which if you sold — would result in capital gains tax? Wouldn't you rather direct your hard-earned cash to a cause you love than pay it in taxes? Fortunately for you, there’s still time to supplement your charitable giving and take advantage of last year’s big tax savings. Savvy taxpayers can cash in on the CARES Act’s extended charitable contributions provision, but only through December 31.

A couple near a laptop make year-end tax planning decisions to max out their tax breaks and consider donating to Scripps.

The Consolidated Appropriations Act extended a measure established under the CARES Act that temporarily enabled taxpayers who itemize to deduct up to 100 percent of their adjusted gross income for cash contributions to a qualifying charity. Normally, you’d be able to write off only 60 percent. This ruling applies only to cash gifts made to qualified charities, such as Scripps, and excludes donor-advised funds and private foundations.

“Effective charitable giving means making larger gifts to a few select charities, rather than smaller gifts to a large number of charities,” says Paul Hynes, CFP, chair of the Scripps Health Foundation Gift Planning Advisory Council and director in wealth management, partner, Aspiriant, LLC. “Also, consider using low-basis stocks, direct charitable rollover from an IRA, and cash gifts that may be deductible under current law even if you use the standard deduction. Of course, consult with your own advisers before you take any action.”

It’s also worth noting that donor-advised fund managers recommend that clients put the allowable amount (equivalent to 60 percent of their AGI) into their fund. Additional cash can be donated to one or more charities to take advantage of the higher AGI deduction ceiling.

Consider topping off your charitable giving with additional cash gifts and see how much it might save you on your 2021 income taxes. If this may be of benefit to you, check with your tax or financial adviser.

Learn more about gift planning, or call Scripps Health Foundation Office of Gift Planning at 858-678-7120.

This content appeared in San Diego Health, a publication in partnership between Scripps and San Diego Magazine that celebrates the healthy spirit of San Diego.