2020 Charitable Donations Update

Did you know that there is still time to make your 2020 donations? You have until December 31st to make any donations for the 2020 tax year.

New for the 2020 tax year (only), the CARES (the Coronavirus Aid, Relief and Economic Security Act) the IRS has made a few changes (IRS Topic No 506).

#1 For taxpayer who do not itemize their deductions they may take up to $300 in a charitable deduction of cash contributions made during the 2020 year to qualified charities.

From the IRS Website : For contributions of cash, check or other monetary gift (regardless of amount), you must maintain a record of the contribution:

  • A bank record or a written communication from the qualified organization containing the name of the organization, the amount, and the date of the contribution.
  • In addition to deducting your cash contributions, you generally can deduct the fair market value of any other property you donate to qualified organizations. See Publication 561, Determining the Value of Donated Property.
  • For any contribution of $250 or more (including contributions of cash or property), you must obtain and keep in your records a contemporaneous written acknowledgment from the qualified organization indicating the amount of the cash and a description of any property contributed. The acknowledgment must say whether the organization provided any goods or services in exchange for the gift and, if so, must provide a description and a good faith estimate of the value of those goods or services. One document from the qualified organization may satisfy both the written communication requirement for monetary gifts and the contemporaneous written acknowledgment requirement for all contributions of $250 or more.
  • If you are unsure if your charity qualifies please check with the Tax Exempt Organization Search tool found on IRS.gov.

#2 The CARES Act has temporarily (2020 only) suspended limits on charitable contributions and increased the limits on contributions of food inventory (again only for 2020). The new limit for charitable contribution (if you itemize) is 100% of your AGI.

To qualify, the contribution must be:

  • a cash contribution;
  • made to a qualifying organization;
  • made during the calendar year 2020

Contributions of non-cash property do not qualify for this relief. Taxpayers may still claim non-cash contributions as a deduction, subject to the normal limits.

If you want to read more on the changes to charitable contributions do to the CARES Act please find them on the IRS website HERE 

 

If you have any questions please feel free to give us a call. We hope you have a wonderful Holiday season and we look forward to see you soon.