Are you sure you want to delete this post?
Seems like everyone that can spare an extra $300 to $600 right now should strongly consider donating that amount to a charity. Reason being, the CARES Act changed the way we can all deduct charitable donations on our taxes. So as long as we do it right, we can give freely with the knowledge that we will get that money back in the form of a tax deduction when we file in 2021.
You used to be able to only deduct charitable donations from your taxes if you itemized. But most people opt for the standard deduction these days, especially after the Trump administration increased the amount of the standard deduction.
But now the CARES Act changed the tax code yet again, adding the ability to deduct up to $300 for an individual, or $600 for a couple, if you donate to an IRS approved charity, and make sure you get the proper paperwork proving that you did.
How to Deduct Charitable Donations From Your Taxes
The federal stimulus bill, known as the CARES Act is giving taxpayers the ability to receive a $300 deduction for donations even if they don't itemize their taxes in 2020.
The change benefits taxpayers who take the standard deduction - it’s up to $300 for individuals and $600 for those who are married and file jointly.
“The CARES Act changes this by allowing taxpayers who do not itemize to deduct up to $300 of cash contributions to public charities with an above-the-line deduction in tax years beginning in 2020,” she said.
Cool thing is, this is not a temporarily change. This will be true for any year going forward. But in keep in mind this is specifically for cash donations --
This provision is not limited to year 2020 and applies to all future years as well. The increased limits under the CARES Act are available only for cash contributions (other than the donation of food from a taxpayer’s trade or business).
So be sure that the charity you give to is recognized by the IRS first. And also make sure you get the proper paperwork proving you made a charitable donation. Might want to run it by your CPA first and all that. But once all that is out of the way, I think this is great news and should be talked about it more. We can all donate to charity, help out when the economy needs it the most, and get that money back on our taxes next year. Win win win far as I can see. Long as you donate to a worthy cause.