Charitable Giving in 2021

Much of what was new in charitable giving in 2020 through the CARES Act continues in the new year through the Congressional spending package passed last December. Plus, the spending package also has some unique benefits for donors. Contributing to charities could help lower your taxable income, even if you don’t itemize deductions on your taxes. Speak with a professional tax advisor if you have any questions.

The first change is an increase in above-the-line tax breaks for gifts of cash to charity. The tax break is $300 for individuals and has increased up to $600 for joint filers for 2021. Previously, it was only a $300 deduction for both individuals and joint filers. The change doubles the deduction in 2021 if married couples make cash gifts up to $600 to charity. Contributions made to donor-advised funds and private foundations, however, do not qualify for this deduction. Since this is an “above the line” deduction,” all taxpayers can take this break in addition to their standard deduction, even if they do not file an itemized tax return.

Congress’s year-end spending package also continues the raised ceilings for charitable contributions made by individuals and corporations. Very generous individuals can donate up to 100% of their adjusted gross income (AGI) and count 100% of that deduction in the year that the gift is made. Before 2020, charitable deductions were capped at 50% or 60% of a donor’s AGI (depending upon what was donated); and, donors could carry any unused deductions in the following five years at the 50% or 60% ceilings.

Corporations also continue to enjoy a raised charitable deductions ceiling, and it is now even higher. In 2021, the 10% limitation was increased to 24% of a corporation’s taxable income.

These raised ceilings and increased non-itemized deductions offer donors a unique opportunity to benefit by increasing their generosity and helping charities even more during this pandemic. Planned gifts may even be structured so that donations can benefit donors, their families, and their favorite charities now and for many years into the future.

To find out more about how you and your family can help Orchard Village through a planned gift, please contact Joseph Like, Director of Development, at or 847-583-7734