Tax Law Highlights: 2021

The CARES Act provision of 2020 increasing the charitable deduction limit to 100% of adjusted gross income (AGI) has been extended for tax year 2021.  This is a great opportunity for anyone desiring to increase their charitable gifts and lower taxes.

The deductibility limits on appreciated assets remains at 30% of AGI and unused charitable deductions can be carried forward and utilized within the following five years. 

The Pease limitation  – which significantly reduced itemized deductions for higher income individuals was suspended until 2025.  However, the new administration has indicated an interest in reinstituting the Pease limitation prior to 2025. 

From a cost-effectiveness standpoint, the law continues to strongly favor gifts of appreciated assets.

The law retains the charitable IRA rollover for donors who are at least 70.5 years of age. This particular method of giving is expected to grow even more under the new law. (This is also known as the Qualified Charitable Distribution.)

Through 2025, the amount of one’s estate excluded from taxation has been sizably increased, creating opportunities to give now or give more before the provision expires or is lowered by the current administration. 

There are various elements of the most recent tax law changes that will affect people differently, based upon one’s income and giving patterns. Overall, it is favorable for friends of Jesus Film® who want to support the work of the Great Commission—reaching people with the gospel message; going to every tribe, tongue and nation. You could be one of many who will benefit!  You can have a more detailed look at the new regulations on our Cru Foundation website: http://www.crufoundation.org/taxlaw

2021 TAX RATE TABLE:

2021 STANDARD DEDUCTIONS: 

Standard Deductions:  $25,100 Joint, $12,550 Single, $18, 800 Head of Household

AGI Limitation on Charitable Gifts of Cash to Public Charities: 100%

Child Tax Credit: $2,000 ($1,400 of which is a refundable tax credit)

The “annual exclusion” amount from the gift tax remains $15,000 per person, per recipient. This allows each person to give multiple individual gifts of $15,000 each year during his or her lifetime without incurring a gift tax.

God’s hand of protection on the U.S. tax code and its charitable deductions has been gracious.  The Tax Cut and Jobs Act, SECURE Act, and CARES Act all signed into law over the past three years have all contained provisions that enabled generous givers to be more generous while paying lower taxes.  Each person’s situation is unique; therefore, for specific application of how these laws may affect your situation, please consult your own tax advisor. Our team of professionals at Cru® Foundation, also known as The Great Commission Foundation of Campus Crusade for Christ, Inc., is available, however, to provide broad guidance on how these changes may affect you. And by engaging in our Estate Design Service, we can show you how, with proper planning, taxes, fees, and costs in your estate plan can be reduced or even zeroed out.  This service is complimentary, confidential, and without obligation. You can contact us at Cru Foundation team by calling toll free (800) 449-5454 or by email at: [email protected] When you call or email, mention code NY0JWP.

GIFT AND ESTATE TAXES:

Good news on several transfer tax-fronts! The unified gift/estate tax exemption for 2021 was raised to $11.7 million (approximately) and the top tax rate has remained at 40%.  With this increased exemption, you can transfer up to $11.7 million (approximately) during your lifetime, or at your death, without any gift or estate tax.