3 Important CARES Act Updates for 2021

On March 27, 2020 the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was signed into law. It provided $2.2 trillion dollars to American families and businesses put in dire straits by the COVID-19 pandemic.

The CARES Act was the largest economic stimulus bill in U.S. history. However, nine months later the $2.3 trillion Consolidated Appropriations Act (CAA) was signed into law on December 27, 2020, breaking that record.

The CAA updated and expanded the CARES Act for 2021, containing additional tax benefits to continue to encourage charitable donations in a time of uncertainty.

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Here’s what you need to know:

1. Universal Charitable Deduction

In addition to your usual standard deduction, you may now receive an additional tax break of up to $600 for cash gifts for couples and $300 for individuals. This applies to you even if you do not itemize.

2. Required Minimum Distributions

Required Minimum Distributions have returned in 2021, but you still have the option to make a Qualified Charitable Contribution to reduce your adjusted gross income. This will, in turn, lower your taxes while blessing the ministries you love!

3. Charitable Contributions

Good news! In 2021, thanks to the CARES Act, you can deduct up to 100 percent of your adjusted gross income. In 2019, that number was only 60 percent. And if you’re wondering if you can reach that 100 percent mark using your donor advised funds (DAF), the answer is yes… IF 60 percent of your charitable contributions are cash given to your DAF and IF the remaining 40 percent is given to the charity as cash.

Your other option is to give 20 percent in cash to your Donor Advised Fund (DAF), 30 percent in appreciated assets, and 50 percent in cash directly to the charity.

And, as always, you can give via cash, monthly gifts, IRA distribution, or gifts of stock and appreciated assets.

The CARES Act and Lifewater International

For over 40 years, Lifewater has operated as a faith-based clean water and community health organization committed to helping families living in extreme poverty thrive. Lifewater currently holds Charity Navigator’s coveted four-star charity rating.

Using local-knowledge and industry-best practices in WASH (water access, sanitation, and hygiene), Lifewater brings clean water to remote communities in great need, creating transformation that’s built to last. Through the Lifewater Legacy Society, you can leave a lasting legacy of generosity while ensuring your loved ones are well cared for.

“Lifewater blesses both the giver and receiver with the gift of clean water,” Cary A. Paine, President of The Stewardship Foundation, said. “We are confident that their work will have a life sustaining impact and be done well.”

Contact a representative today at representative@lifewater.org to learn more about how you can give charitable contributions with Lifewater.

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