The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: nemmm on December 06, 2020, 10:51:33 PM
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https://www.irs.gov/newsroom/how-the-cares-act-changes-deducting-charitable-contributions
"Taxpayers who don't itemize deductions may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations. For the purposes of this deduction, qualifying organizations are those that are religious, charitable, educational, scientific or literary in purpose. The law changed in this area due to the Coronavirus Aid, Relief, and Economic Security Act."
Is there any catch to this? It seems like this might a good time to donate a little extra to organizations in your local community since you will be able to receive a tax deduction.
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No real catch. The whole point is to encourage people to donate more this year. You do need to donate directly to a charity to claim this deduction; intermediaries such as donor advised funds that are allowed for the itemized deduction are not allowed for this new one.
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Just realize it's a tax "deduction" and not a tax "credit". A deduction just means that you won't pay tax on the $300.
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Another atypical situation, if not strictly a catch, is that this is "per return," not per person. So it is not doubled for those who are MFJ.