The new stimulus bill round #2 extends the $300 charitable contribution tax break from 2020 for those who don’t itemize and makes it valid for 2021 as well. You can get up to $300 deduction in 2020 and another deduction of up to $300 in 2021. Keep a note of any charitable contributions (or receipts, when necessary), and input it on your tax return as well to get the savings.
There’s one notable change from 2020 to 2021 for couples filing jointly: In 2020 couples are capped at just $300 like an individual filer, however, in 2021 they’ll be able to get $600 in deductions.
This tax break can be found on page 2,481/4948 of the massive stimulus bill.
Some people like to donate via Swagbucks where they have various cashback offers on charity donations, just make sure the organization is a 501(c)3. (Confer with a tax advisor for if/how much you can deduct in these cases.)
I’ll paste below what we wrote back when the bill passed for some added details and context:
Since the tax overhaul in 2018, there aren’t many people who consistently itemize their tax deductions since the Standard Deduction increased greatly making it more advantageous for most people. For 2020, the standard deduction is $12,400/single or $24,800/couple. The stimulus bill contains an added tax deduction of up to $300 on money donated to eligible charities for people who do not itemize their deductions. (Those who do itemize already get all their charity deducted on their taxes.)
Let’s say you are in the 24% federal tax bracket and you give $300 in charitable contributions to 501(c)(3) tax-exempt organizations. You’ll then be able to deduct that $300 off your taxable income, and you save $72 on your taxes. That’s on top of your standard deduction. The goal apparently is to increase charitable contributions. Regardless, if you anyway give charity, be sure to do it in a traceable way (e.g. check or credit card) and then claim the deduction on your tax return. Donations $250 or more need a receipt from the charity as well.
A few other details:
- The bill limits this $300 deduction to donations made directly to a charity, not to a donor-advised fund.
- The bill also mentions that it’s limited to cash donations, which seems to exclude things like clothing donations.
- Stock donations apparently do not count.
Related:
- Reminder: Get $300 In Tax Deductions With Charity Donations (2020 Only)
- Stimulus Round 2: Government to Send $600 To Most US Residents; $300 Unemployment Supplement; PPP Funding & More
- Reports: $600 Stimulus Deposits Will Be Received Early Next Week
If you’re looking for ideas in December of how to meet a $300 yearly charitable deduction tax break, well …….what are we doing with all the money we save here? Let alone what we earn! $300… C’mon!
(Yes I know it sounds self-righteous, but I don’t give a damn).
For ARIZONA – to help meet min spend we have a $400 CREDIT for donating to a Qualifying Charitable Organization on the list and $500 CREDIT for donating to a Qualifying Foster Organization.
Past few years I donated $900 as a single, helped meet mind spend, then received $900 back from AZ in addition to the $300 tax deduction from Federal.
more details here: https://azdor.gov/tax-credits/contributions-qcos-and-qfcos
talk to your tax person to see if you would qualify!
Seeing a $40 offer on Swagbucks for donation to ACS of $19+
You could use Chase pay your self back for 30% more point value.
Anybody tried to use Spiral Giving to donate?
I’m curious too! A % of my DD goes into the Giving account, and I got Spiral’s initial $5 into the Giving account but I haven’t transferred the funds to a charity yet. Waiting for my 2nd DD to hit
Yes. The list is pretty broad. You can only donate in dollar increments. If you did the minimum DD, you’ll need to chip in another $0.50 to be able to donate $11 (gets matched to 22). I have no idea if it actually got delivered. I’ll have to check with the organization and see if they got anything. For tax purposes, you are not going to be able to deduct a match, just your donation.
this only applies to cash donations right? Donations of goods don’t count for this as I recall.
correct
It’s “below-the-line” this time. Ie it doesn’t affect AGI like it did last year.
Fixed, thank you
For real? Ugh! They really just make it up as they go along! Only 300 whatever….
But it still reduces your tax bill, right? This only matters if you have something where trying to lower your AGI matters?
so, IRS realized the standard deduction is so high that nobody gives to charities etc, anymore and they are going belly up. Got it.
The IRS didn’t realize anything. The IRS doesn’t write tax laws – Congress does. Congress realized that during these times it’d be useful to give people an above-the-line deduction so they can benefit from charitable giving a bit more. It was a way to help the non-profits.
@Danimal
Typical uninformed, right-wing comment about the IRS. It doesn’t write the tax laws. Congress does.
I think Danimal is referring to the charities going belly up. In 2018, charitable deductions dropped by nearly $54 billion, according to the IRS, most likely due to the tax cut/standard deduction changes in 2017. The pandemic probably will eat into that even more. By giving an above the line deduction, that should hopefully rise dramatically.
Can’t say 2018 dropped as many gave in advance in 17. Need to look at combined 17-18 numbers.
@Danimal
Typical uninformed, LEFT-wing comment about the IRS. It doesn’t write the tax laws. Congress does.
Does it count if I donate to my university? It’s also 501c.
I believe any 501(c)3 works