Giving Tuesday: Support Your Favorite Charity and Take Advantage of This Year’s Special Tax Provision

Today is Giving Tuesday, a day dedicated to encouraging people to do good by giving back to their community. Whether it be donating money to a charitable cause, volunteering, or advocating, Giving Tuesday is a day set to benefit the community.

giving tuesday charitable donationsThere is a special tax provision this year from the CARES Act which benefits both charities and taxpayers. Cash donations of up to $300 made before December 31, 2020, are now deductible when people file their taxes in 2021.

Under this provision, individual taxpayers who don’t itemize deductions can claim an “above-the-line” deduction of up to $300 for cash donations made to charity during 2020. This means the deduction lowers both adjusted gross income and taxable income – translating into tax savings for those making donations to qualifying tax-exempt organizations.

For the purposes of this deduction, qualifying organizations are those that are religious, charitable, educational, scientific or literary in purpose. Cash donations include those made by check, credit card or debit card. They don’t include securities, household items or other property. In addition, cash contributions to supporting organizations and donor-advised funds do not qualify.

Be sure to check the Tax Exempt Organization Search (TEOS) tool on IRS.gov to make sure the organization is eligible for tax-deductible donations.

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