This New Deduction From Your Charitable Contributions As Part of Your 2020 Tax Return
While many of the items on the coronavirus aid bill are temporary, here’s one that could benefit your tax returns for years to come.
Starting in tax year 2020, you can deduct charitable donations totaling up to $ 300 from the adjusted gross income shown on your tax return. This deduction is for people who use the standard deductions rather than listing them on their tax return.
Any qualified charity organization counts, from your favorite animal shelter to your local food bank. Places of worship? Check. Research programs? Yeah. (In fact, you can search the IRS website for records of charities that have requested tax exempt status.)
It is open to anyone with a standard tax deduction, regardless of your income level. In 2020, the standard deduction is $ 12,400 for individuals, $ 24,800 for married couples, and $ 18,850 for the head of household.
When the Tax and Employment Cuts Act of 2017 was passed, the higher standard deduction it offered dramatically increased the proportion of people – about 90% – who switched to this method instead of making lists. But donations are often collected by nonprofits, reminding supporters that their monetary donations are tax-free.
Thus, the last adjustment again provides taxpayers with tangible benefits that are easier to obtain when they contribute to charity, even if they are not at the level at which to list their contributions. (Of course, the warm feathers received from donations to your favorite organization have not gone anywhere.)
Whether you feel obligated to donate to a coronavirus or research organization, Charity Navigator has compiled a list of the best charities in several categories.