Did you know that for most taxpayers, up to $300 of donations to charity are deductible in 2020?
If you’re still considering making a charitable gift to United Way of Southeast Louisiana before the year’s end, check out the four things you need to know to take advantage of the charitable deduction before it’s too late.
1. What is the charitable deduction?
On March 27, 2020, Congress enacted The CARES Act, which created a new charitable deduction available to the 120 million Americans that do not itemize their deductions. This new benefit, also referred to as a universal deduction, allows for a charitable deduction of up to $300 per individual. This is an above-the-line contribution deducted from the individual taxpayer’s income before calculating their adjusted gross income.
2. Who is eligible for this charitable deduction?
Donors who do not itemize their tax returns are eligible for a new $300 charitable deduction. This special deduction applies to approximately 120 million Americans who filed non-itemized tax returns every year. That number includes roughly 5 million United Way donors in the U.S. who do not itemize.
3. When does the deduction expire?
The charitable deduction was enacted to help charities raise donations in 2020 and expires on December 31, 2020.
4. How does this deduction benefit United Way donors?
Roughly 5 million United Way donors in the U.S. do not itemize their taxes. Of these donors, about 4 million gave less than $250 to United Way in 2018. If these individuals increased their total charitable donations to $300, they would be eligible for this tax deduction, creating a lower taxable income. In simple terms: it pays to give!
United Way of Southeast Louisiana is providing food, shelter, transportation, mental health resources, child care, and more during the COVID-19 health and economic crisis. But our community needs will soon outpace resources. Please consider donating to United Way today to take advantage of this year’s charitable deduction so we can continue this critical work together.
Need free tax help? Our VITA program offers free tax help to individuals, families, persons with disabilities, the elderly and limited English speaking taxpayers who need assistance in preparing their own tax returns.
Find out what United Way is doing to help our neighbors cope with the pandemic here.