’Tis the Giving Season, but Hurry To Get This Tax Break

$300

That’s how much charitable giving taxpayers can deduct this year if they’re among the vast majority who file their tax returns using the standard deduction.

Thanks to a temporary law originally authorized last year to encourage philanthropy during the COVID-19 pandemic, more people can get a tax break for charitable donations. The special tax provision was extended through 2021, meaning if you’re in the spirit of giving this holiday season (save your receipts if you just participated in Giving Tuesday!), you’ll get a little for giving a little.

“People should take advantage of it and hurry, because it expires in 30 days,” said Mark Steber, chief tax officer at Jackson Hewitt. “This is a benefit most people can take because, I would say, north of 80% to 90% of people take the standard deduction.”

Up to $300 in cash contributions made to qualifying tax-exempt organizations can be deducted if taxpayers are taking the standard deduction on their returns. Usually, filers are only allowed to write off charitable donations if they itemize their deductions, instead of using the simpler and far more popular standard deduction

That $300 translates into 2021 tax savings by lowering a taxpayer’s adjusted gross income and taxable income. Married couples filing jointly can deduct up to $600, the IRS said. 

Have a question, comment, or story to share? You can reach Medora at medoralee@thebalance.com.

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