The historic CARES Act, which became law on March 27th, created higher limits for charitable contributions in 2020.

• If you don’t itemize deductions on your tax return, you can now deduct up to $300 in cash donations made to churches or non-profits. This means your taxable income is lowered by the amount of your cash donation, up to $300.
• If you itemize, you can deduct up to 100% of your adjusted gross income in 2020, up from 60% in 2019. If you donate more than that, you can also carry the balance forward to deduct in future years (up to 5 years).
• If you’re interested in increasing your AGI and you have funds invested in a Traditional IRA or 401(k) plan, you could convert some or all of them to a Roth account. This would create taxable income (from the conversion) against which you could deduct more charitable donations. The bonus of this conversion is that you would not pay any additional income taxes on the amount converted or earned on those funds in the future as long as the rules are followed.
• Corporations can now donate and deduct up to 25% of taxable income, up from 10% previously.