Stimulus Bill Incentivizes Charity with $300 Contribution Deduction
A $2 trillion stimulus package was approved and then signed into law on Friday by President Donald Trump. It is designed to help the economy during the coronavirus pandemic by providing business and individuals with financial assistance. Most adults with a social security number will receive a $1,200 check within a couple of weeks. There’s also a $500 payment per child for parents. Cruise lines were left out of the package while help is coming for airlines and hotels.
But there’s another benefit outlined in the bill that wasn’t previously advertised much. A new above-the-line charitable deduction was included as an incentive for those who want to donate to charities. Taxpayers will be able to claim up to $300 in cash contributions made to a nonprofit charity this year as a deduction from their gross income if they take the standard deduction ($12,400 for individuals and $24,800 for married couples filing jointly) on their 2020 tax return.
So for example if you are in the 10% tax bracket and donate $300, this provision would cave you $30. If you’re in the 37% tax bracket, then it would save you $111. Donations since January 1, 2020 will qualify, and the deduction will apparently continue into 2021 and beyond, as per Doctor of Credit.
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You can also look at different offers to sweeten the deal if you plan on donating. American Airlines foe example is partnering with the American Red Cross to raise funds for the COVID-19 outbreak. From now through April 30, AAdvantage® members can earn 10 miles for every dollar donated to the Red Cross with a minimum $25 donation.
Conclusion
If you have the means, then this is the best time to donate as many people are hurting both emotionally and financially. Make sure to do your research and donate to a charity where most of the money donated goes for programs instead of covering expenses of raising money. Look up the charity with one of the major charity watchdogs, including the BBB Wise Giving Alliance, Charity Navigator, and CharityWatch.
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Thank you as always for the heads up. Just curious… Do you think donations of items to organizations such as Goodwill, Salvation Army will qualify?
Stay healthy!