It’s exciting to see a charitable giving tax deduction included in the recent CARES Act. Included is a section allowing up to $300 of deductible charitable contributions for taxpayers who do not itemize (which is the case for most taxpayers in recent years). This equates to approximately $45 in tax savings for the average donor at a 15% effective tax rate.
The new “above-the-line” deduction is effective for 2020 tax returns (which will be filed in 2021) and directly reduces your taxable income. Donations to donor advised funds and certain private organizations are not deductible, but most public charitable organizations are included in this new law.
“We’re thrilled to see that the IRS recognized charitable giving in the CARES Act,” said Community Foundation Finance Director Betsy Hull. “This demonstrates the importance of charitable giving in a time like this.”
While you cannot claim this new deduction if you itemize, the IRS also increased the cap on annual giving for itemizers. Not sure if you’ll claim the standard deduction? Here are the amounts for your 2020 tax return:
Single; Married Filing Separately
Married Filing Jointly
Head of Household
For more information, please consult your tax advisor.
If you wish to explore future giving options, please consider Give DeKalb County on May 7, 2020. This 24-hour day of community giving supports local nonprofit organizations and the communities they serve. This year Give DeKalb County comes at a critical moment. Over 75 percent of nonprofits nationwide have had to cancel fundraising events due to COVID-19. They rely on these events to fund much-needed programs and for operational support. Now more than ever, Give DeKalb County can have a tremendous impact on our local nonprofits! Learn more at www.givedekalbcounty.org.