A simple gift with tax benefits
The term “cash” describes a few ways to give. If you want to secure a charitable income tax deduction this year, pay attention to the timing of your gift:
- Cash: Give by December 31
- Check: Postmarked by December 31 (The US Postal Service may not postmark your envelope on the day you drop it in the mail, so mail your check early.)
- Credit card: Appear on your statement by December 31
See it in action
Jonah received a modest inheritance from a relative. Since he already planned to make a gift to Indiana University this year in almost exactly the amount of the inheritance, it was very simple to make an online donation of that inheritance money. We sent Jonah the proper acknowledgment of his gift, which he used to secure an income tax deduction when he itemized.
The best gift isn’t always the easiest
While a cash gift makes the same impact at IU as other types of gifts, you shouldn’t choose this option purely out of convenience. Other types of gifts can provide you with various tax and planning benefits that may be worth exploring.
Limitations on deductions
- Only gift amounts that surpass 0.5% of your adjusted gross income (AGI) qualify for a deduction.
- If you are in the top 37% tax bracket, the tax benefit of your deduction is capped at 35%.
- The maximum deduction for a gift of cash is 60% of your AGI. Any excess deduction can be carried over for up to five years.
Let us help
The Office of Gift Planning Services is happy to answer your questions and provide more information.
If you’ve already made a planned or deferred gift to IU, let us know. You might qualify for Arbutus Society membership!