As we enter the giving season, there is an additional reason to be charitable. Congress enacted a special provision that allows more people to easily deduct up to $300 in donations to qualifying charities this year.
Since the increase in the standard income tax deduction in 2018, only 11 percent of taxpayers itemize deductions, so fewer taxpayers take advantage of the charitable deduction. But to both encourage and reward giving in this difficult year, as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act Congress created a one-time $300 charitable deduction for people who do not itemize on their tax returns. To qualify, you must give cash (including paying by check or credit card) to a 501(c)(3) charity. Gifts of goods or stock do not qualify.
While $300 may not seem like much, it can make a big difference to smaller, local charities. And a lot of $300 gifts can add up. One thing that’s not clear is whether a married couple filing jointly can deduct $600. While it’s logical that they should be able to do so, the IRS has not clarified this yet. With just weeks left in the year, time is slipping by.
Here are some places you might take a look at to determine which charity you would like to support before the end of the year:
- Give Directly
- Giving Compass
- Community Foundation Locator
- Philanthropy Together
- Charity Navigator
- Charity Watch
- Kristof Impact
I bet we can all agree this has been a year in crisis and goes without saying that charitable organizations are in more dire need than ever before. These organizations, whether local, regional or national directly impact the communities we live in. Tis the season for caring and giving, and an extra incentive to deduct your $300 gift.
For more information from the IRS about the tax deduction, click here.