Charitable Deductions

CHARITABLE DEDUCTIONS – an above the line deduction for 2020 and 2021

Good news for those that love to give back but don’t itemize their deductions. Due to these unprecedent times, you can now take a $300, above the line, deduction for cash donations in 2020. What does ‘above the line’ mean? An above the line deduction reduces your taxable income for calculating taxes due before credits are applied.

If you do itemize your deductions, you’re allowed to deduct up to 100% of your adjusted gross income (AGI) for cash donations instead of the usual 60%.

If the Covid relief bill passes then both those items will be extended to 2021 with the only change being that married filing joint (MFJ) will be able to deduct $600 above the line cash donations.

There are just a few days left to make a charitable donation for 2020.