Don’t Forget The Special Income Tax Deductions For 2020
Do you think that there are no holiday gifts when it comes to income taxes? If you said no, then read on. I know that I did a similar blog, but this will provide a reminder as we near the end of the year if you haven’t already made donations.
For this year, 2020, there is a new provision that will allow more taxpayers to get the benefit of a charitable deduction. Even if you don’t itemize deductions.
Due to a special law change made earlier this year, cash donations of up to $300 made before December 31, 2020 will be deductible when individual 2020 returns are filed. This comes due to COVID-19 and the fact that charities are struggling to help those in need. This pertains only to donations to a qualified charity.
The deductions will be “above the line” which means that your adjusted gross income and taxable income will be lowered. Cash donations – those made by check, credit card, debit card or cash – are allowed. No security donations, household items or other property qualify for this special income tax deduction.
The key here is that you must have a record of the donation and the donation must be made to a qualifying charity. Keep your receipt of acknowledgment letter from the charity and retain a cancelled check or a credit card receipt. If you would like more information on recordkeeping rules, see Publication 526 available on IRS.gov.
Feel good and benefit your favorite charity. They will thank you.
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