By Lee Walker | 2 of 4 in the Year-End Giving series
In America, December is a time for giving. And it goes beyond simply gifts to family and friends. Americans celebrate Christmas with an outpouring of contributions to churches and worthwhile causes.
- From the red kettles of the Salvation Army to the Thanksgiving and Christmas turkeys distributed by city missions;
- From the special collections for underprivileged children collected in Kid’s Church to the to coat drives to offer warmth to the homeless;
- From the offerings gathered to say Merry Christmas to faraway missionaries to multi-week Christmas offerings at many churches…
Americans in December turn to generosity!
In 2021 that wonderful spirit of giving is still being challenged by the pandemic. It will be interesting to see how our citizens (and our congregation) respond to giving opportunities again this year. Here at Bible Center, our giving has remained remarkably strong. Contributions in December last year reached record levels. And this year the goal is even higher. Our prayer is for God’s provision through His people so the work of our church can continue, and even expand, in these extraordinary times.
To address some of the challenges related to generosity, this year the federal government has continued three income tax adjustments through the CARES Act related to charitable contributions:
1. For those who don’t itemize deductions
With changes to the standard deduction in recent years, only about 10% of the population now “itemize” their deductions when filing their income tax return. As a result, most people are not able to take advantage of deducting church contributions when calculating their taxes. But for 2021, even those who do not itemize can deduct up to $300 of any qualified contributions, such as giving to the church. For married couples filing jointly the amount is $600.
2. For those who itemize deductions
For individuals who DO itemize deductions, there is another positive change that continues to be available for this year. It relates to the percentage of one’s income that can be deducted. Previously deductions for charitable contributions could not exceed 60% of one’s adjusted gross income (AGI). For 2021 that limit continues to be 100%. Thus, if a person wants to give out of past savings or accumulated assets she can now give up to the full amount of her income for the year, thus effectively eliminating all income tax.
3. Business Contributions
Thirdly, another item related to percentages has to do with the amount a business may contribute. Previously the contributions limit for businesses was 10%. Again for 2021, that amount has been raised to 25%
It should be noted that the rules related to items 2 and 3 above apply only for direct cash contributions to the church (or any qualified charity) and do not apply to contributions to donor-advised funds. For those who may take advantage of these changes for 2021, we suggest you consult your tax advisor.
For questions about church contributions, feel free to contact our Senior Development Officer, Lee Walker, at firstname.lastname@example.org or at 304-346-0431.
Lee Walker is a graduate of Appalachian Bible College and has an MBA from Marshall University. He previously served for 29 years at ABC, working mainly in administrative areas including Development and Business. For 16 years he was Executive Vice-President of the College. Pastor Walker began his service at Bible Center in 1998 and served as Executive Pastor until 2017. He is married to Marty, has two children, three step-children and 17 grandchildren.