Giving Tuesday
As we make our way through the Thanksgiving weekend, and the never ending “shop and spend” rituals of Black Friday, Buy Local Saturday, and Cyber Monday, I was relieved to awake this morning and find my inbox and my social media accounts filled with Giving Tuesday reminders from my favorite charities.
Giving Tuesday reminds us to step away from our online shopping carts and cyber discount codes and think about those who need our help this year more than ever. The American Red Cross, Salvation Army, Feed America and thousands of non-profits across America are struggling to meet the incredible demand for support and services created during this pandemic-strained economy. As of October, 11 million Americans remain unemployed and the charity Feed American estimates that 1 in 6 Americans face food insecurity due to the extended economic challenges of COVID-19.
Giving Tuesday seems an appropriate time to highlight one of the little known provisions of the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) passed by Congress in late March. The CARES Act accurately predicted the unprecedented need for social support this year and included important provisions making it easier for Americans to deduct charitable contributions on our 2020 tax returns.
The CARES Act opens the opportunity for the approximately 85% of American taxpayers who take the standard deduction to qualify for up to a $300 “above the line” deduction for qualified charitable contributions. While this universal deduction opens the door for nearly all American taxpayers to qualify for a charitable tax deduction, there are a couple of key caveats to remember.
First, the donation must be made directly to the charity and it only applies to cash contributions, including contributions made by check or credit/debit cards, but excluding tangible contributions of personal property (i.e. your old washing machine), stocks, etc.
Additionally, for the purposes of this specific deduction, the IRS definition of qualified non-profit includes those that are religious, charitable, educational, scientific, or literary in purpose.
The second important provision applies to the approximately 15% taxpayers who itemize their deductions. The CARES Act temporarily suspends the limit on charitable contributions. For 2020, instead of being limited to 60% of the taxpayer’s adjusted gross income (AGI), charitable deductions up to 100% of AGI will be permitted.
As we lean into December and look forward to putting 2020 in our rearview mirrors, please remember that Giving Tuesday is more than just a day; it is an opportunity to do all that we can to support the charities who help our fellow Americans who are in need. Please, take the time to donate generously.
