Giving Tuesday December 1, 2020
We’ve all heard of Black Friday and Cyber Monday, but did you know the day after Cyber Monday is called Giving Tuesday? It’s the day people are encouraged to make donations to the charitable organizations they want to support. This year Giving Tuesday (Dec. 1, 2020) is more important than ever before.
Last spring, in response to the Coronavirus pandemic, the CARES Act was signed into law. One of the lesser known items in the Act enables taxpayers to take an above-the-line deduction for up to $300 in cash donations. That means you don’t have to itemize to take the deduction. Donations cannot be stocks or bonds, assets or donated items and must be made directly to a charity. You can pay for the donations with cash, credit card, or a check, but they must be made before December 31, 2020.
In 2018 the Tax Cuts and Jobs Act went into effect. It doubled the standard deduction resulting in fewer taxpayers taking itemized deductions. Under the CARES Act, you can take the standard deduction and up $300 in charitable donations. If you itemize, you can make charitable contributions up to your adjusted gross income. (Itemized deductions include charitable donations, mortgage interest and other deductible items) Unfortunately, under the Tax Cuts and Jobs Act, you can no longer deduct business expenses as an employee (W2 worker) from 2018-2025. You can still deduct these work expenses on your Pennsylvania state tax return, but make sure you have a document from your employer requesting you work from home.
Because of the pandemic, many nonprofits have seen their expenses increase as they help more people who have lost jobs or faced medical crises. Others, like performing arts centers or community education organizations, have seen a loss of revenue. If you are able to give, now is the time to support the charities that mean the most you. Remember to save the acknowledgement letters and emails the charities send you. They are your receipts for tax purposes.