2021 Gifts to Charities

As we near the end of the year (it will be here before we know it), you may be thinking about donations to charities. 

But, then you remember you don’t itemize deductions on your income taxes, so does it really matter when you make your charitable donation?  Last year, there was a deduction of up to $300.00 for cash contribution per individual; $600.00 for married filing joint taxpayers.  It is expected that this will be available again this year.  But, you better have supporting documentation for the donation, should it ever be questioned.    

All donations must be made to a qualified charity. The donation cannot be made to help establish or maintain a donor advised fund, it cannot be an amount carried forward from prior years, it cannot be made to most private foundations, it cannot be made to a charitable remainder trust.  These exceptions also apply to taxpayers who itemize their deductions, so don’t feel bad.

Cash contributions include those made by check, credit card or debit card as well as unreimbursed out-of-pocket expenses in connection with volunteer services to a qualifying charitable organization. Cash contributions don’t include the value of volunteer services, securities, household items or other property.

If you do itemize, however, you can generally claim a deduction for charitable contributions to qualifying organizations. The deduction is typically limited to 20% to 60% of adjusted gross income and varies depending on the type of contribution and the type of charity. The law now allows taxpayers to apply up to 100% of the AG, for calendar-year 2021 qualified contributions. Qualified contributions are cash contributions to qualifying charitable organizations.

The 100% limit is not automatic; a selection must be made to take the new limit for any qualified cash contribution. Otherwise, the usual limit applies. Other allowed charitable contribution deductions may reduce the maximum amount allowed under this election which must be made on the 2021 Form 1040 or Form 1040SR. 

If in doubt, check with your tax preparer or irs.gov. 


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About the Author

Kay Sowa is a paralegal in the Trusts and Estates Group at Capehart & Scatchard, P.A. She is an IRS Enrolled Agent, an Accredited Estate Planner®, and a Certified Trust and Fiduciary Advisor. She oversees the trust and estate administration practice for the firm. She is an accomplished author and lecturer who has frequently spoken on behalf of a number of organizations including the National Business Institute and the Institute of Paralegal Education.

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