Over the last few years the standard deduction for individuals has drastically increased, making it more and more difficult to itemize on their income tax returns. This, in turn, has left people feeling less incentive for charitable giving.
In 2020 non-profits are struggling more than ever to find funding. Non-profits are not able to host large fundraisers, and donors feel the impact of COVID-19 with less expendable cash. These organizations are struggling now more than ever.
The IRS is hoping to provide some additional incentive for taxpayers to continue their charitable giving, even in these difficult times. In 2020 the IRS is reminding non-itemizers that they may be able to claim an additional above the line deduction, up to $300, for their charitable contributions made to qualifying organizations in 2020.
What’s the catch? The charitable contributions must be paid with cash, credit card, ETF, check or payroll deduction; contributions of property do not quality. Also, charitable contributions made to donor advised funds, supporting organizations or non-operating private foundations – even if made with cash, do not qualify for this above the line deduction. It should also be noted that this is only for qualified donations made in 2020. You are not able to claim this deduction for contribution carryovers from prior years.
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