Whether taxpayers are supporting natural disaster recovery, COVID-19 pandemic aid, or another cause that's personally meaningful to them, their charitable donations may be tax-deductible. These deductions basically reduce the amount of their taxable income.
Here's how the CARES Act changes deducting charitable contributions made in 2020:
Previously, charitable contributions could only be deducted if taxpayers itemized their deductions.
However, taxpayers who don't itemize deductions may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations. For the purposes of this deduction, qualifying organizations are those that are religious, charitable, educational, scientific, or literary in purpose. The law changed in this area due to the Coronavirus Aid, Relief, and Economic Security Act.
The CARES Act also temporarily suspends limits on charitable contributions and temporarily increases limits on contributions of food inventory.
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Schedule a ConsultationThis article is for general information only and is not tax or legal advice for your specific situation.