Cash donations up to $300 that were made to qualified charitable organizations in 2020 are now tax deductible, even if you don’t itemize your deductions. The Coronavirus Aid, Relief and Economic Security Act (CARES Act) that was passed in March 2020 included the tax law change to help support charities. This is a small tax deduction but is worth mentioning.
Charitable contributions can normally only be deducted by taxpayers who itemize deductions on their return. The 2017 Tax Cuts and Jobs Act increased the standard deduction amount so much that most Americans now take the standard deduction rather than itemizing. Now, taxpayers who claim the standard deduction also have an opportunity to deduct up to $300 in charitable donations. The deduction is only available to taxpayers taking the standard deduction, with the $300 limit applicable to all returns regardless of filing status. Additionally, only cash contributions qualify for the deduction. Cash contributions are any contributions paid with cash, check, electronic fund transfer, credit card, payroll deduction, etc. Contributions of noncash property do not qualify for this deduction.
For 2021, a similar deduction for taxpayers taking the standard deduction was made available by the Taxpayer Certainty and Disaster Tax Relief Act of 2020. The $300 deduction limit will remain for most filing statuses, but for Married Filing Jointly taxpayers the limit will increased to $600.
Make sure to include your donations on your tax return even if you take the standard deduction! Review Publication 526, Charitable Contributions to confirm your cash donation qualifies for the deduction.
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