Donors benefit under the new CARES Act
Donors may receive benefits under the new CARES Act (Coronavirus Aid, Relief, and Economic Security Act). If you take the standard deduction on your 2020 tax return (the one that you’ll file in 2021), you can claim a brand new “above-the-line” deduction of up to $300 for cash donations to charity you make this year. Only cash gifts are eligible for the $300 deduction. Gifts of stocks, clothes, vehicles, and land are not eligible. (Chronicle of Philanthropy 4/15/20) Donations to donor advised funds and certain organizations that support charities are also not deductible. Normally, you have to itemize on Schedule A to get a tax break for charitable donations. In this case, though, it’s the other way around—if you itemize, you can’t take this new deduction.
Not sure if you’ll claim the standard deduction? Here are the Standard Deduction Amounts for your 2020 tax return:
- Standard Deduction for Single / Married Filing Separately — $12,400
- Standard Deduction for Married Filing Jointly — $24,800
- Standard Deduction for Head of Household — $18,650
Taxpayers who are at least 65 years old or blind can claim an additional standard deduction of $1,300 ($1,650 if using the single or head of household filing status). For anyone who is both 65 and blind, the additional deduction amount is doubled.” – Kiplinger.com / CARES Act Expands Charitable Giving Tax Deductions