GREENSBORO, N.C. — Yes, the clock is ticking down to the new year and time is running out for you to get a tax deduction too. Tax deductions help lower your taxable income, which lowers the amount of taxes you owe.
This year, 2021, the CARES Act expanded the charitable tax deduction.
Taxpayers, whether they itemize or not, can deduct charitable donations. If you're single, you can donate up to $300 to charity and then write off the entire amount on your taxes. Married couples can give $300 apiece to charity, so that's $600 total.
“They can reduce their income by $600 much like when they make an IRA contribution they bring their income down $600. If you don't have enough to itemize you can deduct the charitable giving and still get the standard deduction,” said Kevin Robinson of Robinson Tax & Accounting Services.
The donations must be made to a charity that is recognized by the IRS as being tax-exempt or what's called a 501.C.3. This must be a money donation, giving items like Goodwill doesn't count with this specific deduction.
This $600 is a change from the last tax season. In 2020, the total amount to give to the charity above the standard contribution was $300, whether single or married.
The IRS website says:
At a time when many charitable groups are struggling during the pandemic, the IRS highlights the new provision and urges people to make sure they donate to a qualifying charity. The special Tax Exempt Organization Search tool on IRS.gov can help people make sure they donate to a qualified charity.
"The pandemic has created unique challenges for tax-exempt organizations, and we want to make sure people don't overlook this special tax deduction that's available this year," said Sunita Lough, IRS Commissioner of the Tax Exempt and Government Entities division. "Donations to qualifying charities can reduce people's tax bill when they file in 2022."