by Gregory S. Dowell

January 6, 2021

Under the tax act known as TCJA, many taxpayers were no longer able to itemize deductions and were better off taking a standard deduction.  With a standard deduction, the amounts given to charity are not deductible.  Prior to 2020, only those individuals who itemized their deductions could get a tax benefit for the amounts given to a nonprofit organization.  That changed, however, with the coronavirus-related rules that came out in 2020.  A new deduction is available in 2020 for those who take the standard deduction, rather than itemize.  In those cases, a deduction may be taken for up to $300 of cash (cash, not noncash) contributions made to a public charity, such as a church, school, etc.  This same expansion does not apply to funds given to a donor advised fund or to a IRC Section 509(a)(3) supporting organization.  The same rules apply as far as substantiation, in that the burden remains with the taxpayer to prove the contribution and to have a receipt from the charity.  In other words, this is not an automatic extra $300 that is added to the standard deduction.  In 2021, a married couple filing jointly can deduct up to $600 of such contributions if they take the standard deduction.