This year has been a whirlwind of unexpected events. Even though medicine is traditionally expected to be a stable profession, many physicians have lost their jobs, been forced into retirement, or furloughed during pandemic times. Regardless of our income situation, physicians are still hopefully in the financial position to give.
Most physicians contribute financially in the form of cash donations to charity, mainly because it is the simplest means to give. Given the tax changes in recent years, a large number of physicians no longer itemize deductions either, so donor-advised funds (DAF) aren’t necessarily an option (unless you’re donating significant assets or lumping in several years worth of donations into one).
For those who are simply donating cash to charities, there are a few pointers to help maximizing your financial situation no matter how small or large your contributions are. Consider these tips a means of “couponing” for high income folks. There’s nothing wrong with doing it, and the effort needed is minimal:
- Due to the recent CARES Act provision in 2020, up to $300 in cash charitable donations are deductible even if you take the standard deduction for your taxes. If you are in the 35% marginal tax bracket, this means that a $100 donation costs you “only” $65. Be aware that in 2021, you can get $600 in charitable deductions if you are filing married.
- Most charities accept credit cards for donations. If you are signing up for credit cards at the end of the year, you can certainly use them to help meet minimal spend. You can lump your planned donations for the following year to this year to increase your spend if you choose.
- If you have a Chase Freedom credit card, this quarter gives you 5% back for purchases through PayPal. Many charities accept PayPal. If not, you can generate a credit card number through PayPal Key. This means that every $100 in cash donations “costs” you $95. (referral link to the Chase card gives you $200 in signup bonus)
That’s it! What other tips do you have for cash donations?
Photo courtesy of Flickr.