Tax Tip: Charitable Contributions
Roughly nine out of every ten taxpayers take the standard deduction instead of itemizing. In an effort to encourage people to give to charitable organizations, the CARES Act now allows up to $300 charitable deduction for all cash donations made in 2020 regardless of whether or not the taxpayer itemizes. This deduction lowers both adjusted gross income and taxable income. The cash donations need to be made to qualifying tax-exempt organizations in order to be deductible. The taxpayers are still required to keep receipts for any cash donations over $25. If the taxpayer itemizes in 2020, the charitable donations will be reported on schedule A and they are not limited to $300.
Consult with your tax professional at Ketel Thorstenson about this or other tax matters because each situation is different. Don’t navigate the difficult and ever changing tax codes and legislation on your own. Ketel Thorstenson CPAs and tax professionals receive advanced training and continuing education all year long to keep our service on the forefront of the tax industry. Call us today for guidance on tax planning, tax return preparation, and tax legislation affects or questions.