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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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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