2020 Year End Tax Planning – $300 Charitable Contribution Deductions

Back in 2017, Congress passed the Tax Cuts & Jobs Act. Part of this Act doubled the standardized deduction. Since then, many people who used to itemize their deductions are now opting to take the Standard Deduction instead of itemizing their deduction. One draw back is that charitable contributions are included in the itemized deductions. This means those people are no longer claiming a charitable contribution deduction.

This isn’t necessarily bad, if the standard deduction is larger than all their itemized deductions, they still get a benefit for taking the standard deduction. As a way to encourage more charitable contributions, Congress included a new deduction for charitable contributions that everyone can take. This was done as part of the CARES Act, one of the coronavirus stimulus packages passed in 2020. The charitable contribution is limited to $300 per return and the contribution should be made during 2020 to qualify.

So, as the year is coming to an end, you can consider being charitable and knowing that at the very least, you’ll see a tax benefit for $300 of those contributions.

If you want to read more about this new deduction, check out my friend Kay Bell’s blog from earlier this year on her Don’t Mess With Taxes Blog.

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