Deduct Your Charitable Donations for 2021 with the Standard Deduction
If you are among the 9 out of 10 taxpayers who file for the standard deduction on your individual income tax return, you may qualify for extra tax savings on your 2021 return with the charitable giving deduction for 2021.
Normally, only those taxpayers who itemize can take deductions for charitable giving. However, in 2020 the Coronavirus Aid, Relief, and Economic Security (CARES) Act allowed taxpayers to take up to $300 in deductions for qualified charitable giving without itemizing their returns. The Taxpayer Certainty and Disaster Tax Relief (TCDTR) Act of 2020 extends this extra deduction allowance through the end of 2021 and doubles the maximum deductible charitable giving for couples who are married filing jointly to $600. Deductions lower your taxable income and may help to reduce your total federal tax burden for the year.
Qualifying contributions
The maximum of $300 (or $600 for married filing jointly) in charitable donations allowed for individuals to deduct without itemizing applies specifically to cash donations to most charitable organizations. These donations include contributions made through cash, credit, debit, and check as well as out-of-pocket expenses connected to volunteer work that were not reimbursed.
Make sure that the charitable organizations that you donated to are recognized by the IRS as charitable organization if you want your donation to qualify for the deduction. To check if your donation qualifies, use the IRS Tax Exempt Organization Search Tool.
Contributions that don’t qualify
Not all charitable giving can be applied to this deduction. There are specific types of charitable organizations that do not qualify. The following contributions do not count toward the deduction:
- Gifts to supporting organizations
- Contributions to establish or maintain donor advised funds
- Cash contributions carried forward from prior years
- Contributions to most private foundations
- Contributions to charitable remainder trusts
- Non-cash contributions such as value of volunteer service, household items, or other property
Keep in mind that these limitations are specifically on this special deduction for filers who take the standard deduction. If you do choose to itemize your return, noncash donations you made, may qualify for a deduction on your itemized return. Talk with your tax preparer if you are considering itemizing your return to get help making the most advantageous decision for your 2021 tax filing.
Keep a record
As with any other item on your taxes, it is important to keep clear records of the donations you claim toward the charitable deduction. This may be in the form of a written acknowledgement from the organization, or a bank statement showing the payment to the organization. The record must include the date of the transaction, the total amount, and the name of the organization. For a full list of qualifying records, you can review IRS Publication 526.
If you made charitable contributions this year that may qualify toward a deduction, be sure to share your donation records with your tax preparer and reduce what you owe for 2021.
This material is generic in nature. Before relying on the material in any important matter, users should note date of publication and carefully evaluate its accuracy, currency, completeness, and relevance for their purposes, and should obtain any appropriate professional advice relevant to their particular circumstances.
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