Before 2020 comes to an end, you may want to consider charitable giving deductions. December 1st is the National Day of Giving. It’s the perfect time to give back to charities and individuals you value. Not only can giving back allow you to feel good, giving back comes with a variety of financial and tax benefits.
Here are a few critical points regarding charitable giving:
Typically, you may deduct up to 60% of your adjusted gross income (AGI) through charitable donations. In 2020, however, you can deduct up to 100% on cash gifts. If you do not elect the 100% AGI limit, your donations will fall under the typical limitations. Which maybe 50% of your AGI or 60% if you give cash. Check out the IRS Charitable Contribution Deductions for more details.
Thanks to the Coronavirus Aid, Relief and Economic Security (CARES) Act, you can take a standard deduction ($12,000 for individuals and $24,000 for married couples) plus an above-the-line deduction of $300 per person if you make a charitable contribution in 2020. This is great news if you were less inclined to previously donate due to standardizing your deductions rather than itemizing.
To ensure you are eligible for a tax deduction, donate to a tax-exempt organization by checking it on the IRS Exempt Organizations Select Check tool. Before you move forward with your donation, ask the charity how much of your contribution you can deduct.
In addition, if you volunteer your time at a qualifying organization, you may be able to deduct related expenses if they were for the volunteer work you perform without reimbursement. You may not deduct any personal expenses but can use receipts for items purchased such as gasoline or choose the standard mileage deduction, which is 14 cents per mile in 2020.
For more information on charitable giving deductions in 2020 and how it may affect your taxes and finances, consult your tax professional.
Disclosure: This information is provided as general information and is not intended to be specific financial guidance or tax advice. The source used to prepare this material is believed to be true, accurate, and reliable, but is not guaranteed. SW 1414319-1120-c
In addition, Demo DMS specializes in providing strategies and guidance for those who are seeking a better lifestyle in retirement. If you have retirement savings of five million dollars or $50,000, we can ensure it works as hard. As a result, we offer our experience and knowledge to help you design a custom strategy for financial independence. Contact us today to schedule an introductory meeting!