Giving Tuesday is approaching, and it's possible to score a tax break while funding your favorite cause. But there are key rules to know before opening your wallet, experts say. Show An estimated 35 million U.S. adults participated in Giving Tuesday in 2021, donating total gifts of $2.7 billion, a 9% increase from 2020. However, "many people give money and don't get any tax benefits because they don't donate enough to itemize," said certified financial planner Jeremy Finger, founder and CEO at Riverbend Wealth Management in Myrtle Beach, South Carolina. More from Personal Finance: Here's what to know about how to qualify for a charitable tax break. You must itemize to claim the charitable deductionWhen filing your return, you reduce your taxable income by subtracting the greater of either the standard deduction or your total itemized deductions — which may include charitable donations. Former President Donald Trump's signature 2017 tax overhaul nearly doubled the standard deduction, making filers less likely to itemize. For 2022, the standard deduction is $12,950 for single filers or $25,900 for married couples filing together. And if you take the standard deduction in 2022, you can't claim an itemized write-off for charitable gifts. Aim to give profitable assetsIf you expect to itemize deductions, your charitable write-off depends on the type of asset you donate. Juan Ros, a CFP at Forum Financial Management in Thousand Oaks, California, said profitable investments in a taxable brokerage account are "generally the best type of asset to give." Here's why: By donating an appreciated asset, you'll receive a charitable deduction equal to the fair market value while avoiding capital gains taxes you'd otherwise owe from selling, he said.  watch now VIDEO2:2602:26 Here's how to get the most value out of your charitable giving Squawk Box Of course, you'll want to confirm your preferred charity can accept noncash donations. With most portfolios down 15% to 25% for the year, it may be tempting to offload stocks that have declined in value. But it's better to sell those assets, harvest the losses and donate the cash proceeds to charity, Ros said. Consider a charitable transfer from your individual retirement accountIf you're 70½ or older, donating directly from a traditional individual retirement account is "usually the best way to give," said Mitchell Kraus, a CFP and owner of Capital Intelligence Associates in Santa Monica, California. The strategy, known as a "qualified charitable distribution," or QCD, involves a direct transfer from an IRA to an eligible charity. You can give up to $100,000 per year and it may count as your required minimum distribution if you transfer the money at age 72. Since the donation doesn't show up as income, you'll still be getting a tax break, even if you don't itemize deductions, Kraus said. Reducing your adjusted gross income may help avoid triggering other tax issues, such as higher Medicare Part B and Part D premiums. As announced in Budget 2017, tax deduction scheme for donation of computers will be withdrawn with effect from 21 Feb 2017. A company that donates computers to prescribed educational, research or other institution in Singapore and IPC on or after 21 Feb 2017 would not be eligible for any tax deduction. Companies that donated computers (including computer hardware, software, accessories and peripherals such as monitors, printers, and scanners) before 21 Feb 2017 would continue to enjoy the 250% tax deduction, subject to the following conditions: Capital Allowance on Donated Hardware/SoftwareWhen a company incurs capital expenditure on computers bought solely for donation purposes, the company cannot claim capital allowance on those computers. A company may have incurred capital expenditure on computers bought for the purpose of its own trade and fully claimed capital allowance on the computers (i.e. written down value is zero). However, it subsequently does not use them and donates them to one or more IPCs, a balancing charge (BC) equal to the open market value of the donated items (as assessed by IMDA) will be taxed. CARES Act charitable benefits not extended for 2022 The charitable income tax benefits included in the CARES Act have not been extended for a third year As you consider your charitable giving for the year ahead, it may be helpful to have the latest information about the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The charitable income tax benefits that applied to contributions made in 2020 and 2021 have not been extended for a third year. The $300 ($600 for married couples filing jointly) above-the line charitable deductions for single filers who do not itemize deductions and make a qualified cash contribution to a public charity expired as of December 31, 2021. In addition, the charitable contribution deduction limit for a gift of cash to a public charity is now back to 60 percent of one’s adjusted gross income as the 100 percent limit expired as of December 31, 2021. Finally, the required minimum distribution from most retirement plans has been back since 2021, after a brief hiatus in 2020. Stanford’s Office of Planned Giving previously summarized the key provisions in the CARES Act related to charitable contributions made in 2020 and the extended provisions for 2021. Please note that the above applies to federal taxes only; state law may vary. For more information about how the extension of these CARES Act provisions may impact your specific financial situation, please consult with your tax, legal, or financial advisor(s). To speak directly with a member of the Office of Planned Giving, please contact [email protected] or (650) 725-4358. Date Tuesday, March 15, 2022What to read next
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