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Charitable Deduction for Non-Itemizers

August 12, 2020

Our nation has been rattled with uncertainty – from mass school closings to stay-at-home orders. Long gone are the days where going to the bank or the grocery store without a mask is permitted. Infections and death tolls are on the rise, and Americans are afraid for their safety. With these uncertainties, the pandemic known as the Coronavirus has affected the way we live our lives and conduct business.

In response, our federal officials have created The Coronavirus Aid, Relief, and Economic Security Act (“The CARES Act”). The purpose of this act is to provide emergency financial assistance to Americans feeling economic hardships related to this virus.

As part of the CARES Act, congress has enacted the Charitable Donation Deduction. Americans, even non-itemizers, are able to deduct up to $300 in cash donations.

FACTS:

  • Up to $300 tax deduction for individual taxpayers;

  • Up to $600 tax deduction for married filing jointly taxpayers;

  • Available to non-itemizers;

  • Taxpayers do not have to provide documentation with their tax returns, but the IRS does require the taxpayer to keep a written record of all cash contributions; and

  • Deduction will decrease you Adjusted Gross Income.

TO QUALIFY:

  • Contributions should be in cash. Tangible donations do not qualify;

  • Must be made in taxable years after December 31, 2019;

  • Cash contributions should be made to qualifying organization. A qualifying organization is one of the following:

    • A state or United States possession (or political subdivision thereof), or the United States or the District of Columbia, if made exclusively for public purposes;

    • A community chest, corporation, trust, fund, or foundation, organized or created in the United States or its possessions, or under the laws of the United States, any state, the District of Columbia or any possession of the United States, and organized and operated exclusively for charitable, religious, educational, scientific, or literary purposes, or for the prevention of cruelty to children or animals;

    • A church, synagogue, or other religious organization;

    • A war veterans’ organization or its post, auxiliary, trust, or foundation organized in the United States or its possessions;

    • A nonprofit volunteer fire company;

    • A civil defense organization created under federal, state, or local law (this includes unreimbursed expenses of civil defense volunteers that are directly connected with and solely attributable to their volunteer services);

    • A domestic fraternal society, operating under the lodge system, but only if the contribution is to be used exclusively for charitable purposes; or

    • A nonprofit cemetery company if the funds are irrevocably dedicated to the perpetual care of the cemetery as a whole and not a particular lot or mausoleum crypt.

In summary, the COVID-19 pandemic has been hard on everyone. With millions of jobs lost, and long unemployment lines, congress has enacted a $300 benefit for those who are helping others. The Charitable Donation Deduction was created to encourage people to help. Don’t hold back and give to your favorite charity today.

Please call Barbee Tax at (708) 405-2112 to learn more.

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