2021 Consolidated Appropriations Act
We are looking forward to the end of this pandemic. We are hopeful that the vaccines will subdue the virus and ease the suffering of many people. Our prayers go out to each of you. The Friars are grateful for your generous support of our ministries over the years. As we adapt to our new reality, we would like to bring to your attention new tax rules for charitable giving in 2021. In times like these, we believe it is important to provide you with helpful information about how you can help ensure the friars’ ministry will continue far into the future.
The Consolidated Appropriations Act, 2021 was enacted on December 27, 2020. The Act contains incentives that encourage continued charitable contributions in 2021. Below, we offer a few key points to consider as you plan your continued support and make plans to reach out to your financial advisor.
- Deduct up to $300 ($600 per couple) whether or not you itemize deductions
Example: Tina was able to take a tax deduction for the $300 donation she made to the Senior Friars Fund in 2020. Even though she will take the standard deduction rather than itemizing, Tina can now receive a deduction of $300 for her donation.
- Deduct up to 100% of your AGI for the year 2021 when you make any type of cash gift
Example: Chris wants to donate to the Alpha and Omega Fund for Senior Friars and Student Friars. Chris has $70,000 of AGI for 2021 and would like to give the friars $10,000. Chris can deduct 100% of his charitable contribution deduction of $10,000.
- Required Minimum Distributions from your traditional IRA are required for 2021
In 2021, you can still donate up to $100,000 from your IRA to the friars’ ministry without reporting the distribution as income. If your 70th birthday was July 1, 2019 or later, you do not have to take withdrawals until you reach age 72.
- Convert your traditional IRA to a ROTH IRA, donate cash and remove your tax burden
You match the traditional IRA withdrawal amount with a cash donation and write off 100% of your Roth conversion. When you convert your traditional retirement account to a ROTH Account, the conversion allows you to accomplish two goals at the same time: you get the 100% charitable contribution deduction in 2021 and pay no federal income tax on the Roth IRA conversion. For example, you convert $10,000 of your traditional IRA to a ROTH IRA and donate $10,000 to the friars, there would be no additional taxes to pay for your IRA conversion to a ROTH IRA.
Like you, the Province of Our Lady of Consolation continues to adapt in response to the COVID-19 pandemic. With your help the friars can continue to improve lives in the face of the coronavirus crisis and beyond.
Please consult your financial advisor before making any tax, legal, financial planning, or investment decisions. You can always call the Mission Advancement Offices (812) 923-5250 for help with making your gift to the friars.
Thank you for all you do to support the ministries of the friars in this ever-changing world.
Peace be with you,
Shaunna Graf, Director of Major Gifts and Planned Giving
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