The new stimulus bill round #2 extends the $300Â 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.)Â
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:
