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COVID-19 Update – How the CARES Act Effects Tax Benefits Related to Charitable Giving

On Friday, March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act” or “Act”). The Act was one of several Congressional responses to the COVID-19 emergency and it covered many areas, including the tax benefits related to charitable giving.

Generally, there are limitations on deductions for charitable contributions for both individual and corporate taxpayers based on the taxpayer’s adjusted gross income (“AGI”), in the case of individuals, and taxable income, in the case of corporations. The CARES Act increases the limit on individual taxpayers’ deductions for cash contributions to public charities from 60% of the individual’s AGI to 100% of the individual’s AGI. This increase effectively suspends the limit for individuals in 2020.  For corporate taxpayers, the CARES Act increased the income limits on the deduction for charitable cash contributions from 10% of the corporation’s taxable income to 25% of the corporation’s

Update: Tax Filing Date Also Extended to July 15th

As an update to our earlier blog posted, U.S. Treasury Secretary Steven Mnuchin announced this morning that the U.S.is extending the April 15th tax-filing deadline to July 15th.  This extension is in addition to the earlier announced tax payment extension.

Tax payers now will have until July 15th to not only file their federal income tax forms but also make tax payments.  While it is still suggested to file and make payments as early as possible, individuals can defer up to $1 Million.  This encompasses self-employed individuals, and all entities (other than C corporations), such as trust or estates. C corporations get an extension up to $10 million.  While states are encouraged to follow suit, it is important to remember that this tax filing/payment period extension only applies to federal income tax returns.

Another important note is that this relief also applies to estimated tax payments for 2020 that are

Income Tax Payment Period Extended, Tax Filing Deadline Is Still April 15th

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As a strategy to help combat the economic effects of COVID-19, the U.S. Secretary of the Treasury Steven Mnuchin announced on Monday, March 16th, that taxpayers are getting a 90-day extension for paying their 2019 income taxes.  The goal is to free up $300 billion in liquidity and to lessen the cash-flow burdens facing the country as businesses are temporarily forced to close or slash their workforce.

What does this mean?

While the deadline to file your taxes is still April 15th, 2020, tax payments that are made by July 15th will have no interest or penalty.  As of today, individuals can defer up to $1 Million, while C corporations get an extension up to $10 million.  The $1 million deferral for individuals is to help

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