Don’t itemize, but you’re still eager to help your local charity out this season; sound familiar?
Good news: the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, created a charitable deduction of up to $300 in 2020, even if you don’t itemize.
As a result of the Tax Cuts and Jobs Act of 2017, most taxpayers utilize the significantly higher standard deduction instead of itemizing deductions for mortgage interest, state taxes paid and charitable contributions.
Generally, you need to itemize to take the charitable deduction, which fewer people do since the standard deduction doubled a few years ago – now at $12,400 for single filers and $24,800 for married couples filing jointly in 2020.
To qualify for the 2020 deduction, the gift must be made in cash and go directly to the charity, rather than to a donor-advised fund or private foundation. It’s a great opportunity to give back to the community during the pandemic, and still reap the tax benefits.
ClarkSilva is here to help. To learn more about this newly enacted deduction, please reach out to us via email at firstname.lastname@example.org, or give us a call at 401-702-0070.