The Tax Benefits of Giving Tuesday
The main purpose behind Giving Tuesday is of course to provide financial support to non-profits. However, tax benefits can also accrue to donors. This is especially true for donor taxpayers who itemize their deductions. Taxpayers whose deductions exceed the standard deduction and otherwise qualify benefit by itemizing their deductions. See IRS Tax Topic 501 for more information.
As part of the CARES Act, all taxpayers, regardless of whether they itemize, can receive an “above the line” tax deduction for up to $300 of cash contribution to eligible organizations. See COVID Tax Tip 2020-153 for more information. The limitation of charitable deductions to 60% of adjusted income was also relaxed for 2020.
This year Giving Tuesday falls on December 1, 2020. Those inclined to give are reminded that in addition to supporting the good work of nonprofits are the opportunities to reduces one’s federal income tax.