As you know, Christmas is the season of giving. If you are planning to make donations to charities over the next few weeks, keep reading to learn about a special change that can help you claim a deduction for donations on your 2021 federal income tax return.
An Exceptional Measure
The COVID-19 pandemic has wreaked havoc on the finances of a lot of people. As a response, the IRS has taken some extraordinary measures to offer relief to those who need it most.
One of these measures is an exception that allows taxpayers to claim a limited deduction of up to $600 in donations to qualifying charities on their 2021 federal income tax return.
What You Need to Know
Usually, people who opt for the standard deduction cannot claim deductions for their charitable contributions.
However, a new temporary exception allows these taxpayers to claim a limited deduction on their 2021 tax return.
This is important because, according to the IRS, nine out of 10 taxpayers choose the standard deduction, so a lot of people can benefit from this special rule.
The temporary exception allows individual taxpayers (including married taxpayers who file separately) to claim up to $300 for donations in cash made in 2021 to qualifying charities. The limit is increased to $600 for married taxpayers who file jointly.
Keep This In Mind
For the purposes of this rule, cash contributions include donations made by check, credit card, as well as amounts incurred by an individual for unreimbursed out-of-pocket expenses in connection with their volunteer services to a qualifying charitable organization.
To verify the status of a charity, use the Tax Exempt Organization Tool on the IRS website.
Contact the Experts at JT Tax Services
Do you need assistance with personal or business taxes? JT Tax Services is here to help! We give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.
We are located in Oxnard, California. Contact us today by email (firstname.lastname@example.org), telephone (805-984-8890), or through our social media accounts on Facebook, Twitter, and LinkedIn to schedule a consultation or to learn more about our services.