Gifting and charitable giving
Take advantage of 2021 charitable giving tax deductions
If you want to make a qualified charitable distribution: Once you’re age 70½, you can use money from your traditional IRA to gift up to $100,000 annually to a qualified charity without paying taxes. This strategy provides the unique opportunity to support your favorite charities while keeping your taxes lower—the QCD is simply excluded from your taxable income.
If you don’t itemize your tax deductions: You can deduct your 2021 charitable contributions (up to $300 for single filers; up to $600 for joint filers) and they’ll qualify for an above-the-line deduction, which means your adjusted gross income (AGI) will be reduced by your donation amount without having to itemize your return. Note: There’s no plan to continue this provision in 2022.
Also, qualifying donations must be made in cash or cash equivalents (as opposed to stock, for example) and can be directed to most charitable organizations (they can’t be directed to private foundations, supporting organizations, or donor-advised funds).
If you do itemize your deductions: You’ll have the ability to deduct much larger donations when you itemize your return. In 2021, you can still deduct cash contributions of up to 100% (60% in 2019) of your AGI that you make to qualified public charities. For gifts to private foundations, supporting organizations, or donor-advised funds, you can deduct up to 60% of your 2021 AGI. Note: If you make a QCD, you won't be able to claim a charitable deduction with those same assets.