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Charitable Tax Deductions in 2021: What Donors Need to Know, Even if You Don't Itemize

Charitable Tax Deductions in 2021: What Donors Need to Know, Even if You Don't Itemize Header Image
Disclaimer: This information is provided as a public service to highlight a matter of current interest. It is not intended to constitute a full review of any subject matter, nor is it a substitute for obtaining financial or legal advice from an accountant or financial advisor, or an attorney. Information contained within was accurate at the time of publication on December 13, 2021.
Thanks to the Taxpayer Certainty and Disaster Tax Relief Act of 2020, four of the temporary tax changes originally enacted by the Coronavirus Aid, Relief, and Economic Security (CARES) Act now apply through the end of 2021. For those who do not itemize their tax deduction, this means that there is still a charitable tax dedication available. For those who do itemize, it increases the limit on charitable tax deductions. If you aren’t sure if you should itemize your taxes this year, use this IRS resource to find out.
The following is a brief explanation of what these changes mean for donors, sourced from the IRS.
If You Don't Itemize
If you are one of the almost nine in 10 taxpayers who do not itemize, you may still qualify for a limited charitable tax dedication for cash contributions. Individuals who do not itemize can claim a deduction of up to $300 for cash contributions made to qualified charities during 2021, while married individuals filing joint returns can claim up to $600. 
If You Itemize
Usually, individuals who itemize may claim a deduction for qualifying charitable contributions in the range of 20% to 60% of their adjusted gross income (AGI). The Taxpayer Certainty and Disaster Tax Relief Act of 2020 permits electing individuals to apply an increased limit of up to 100% of their AGI for cash contributions made to qualifying charitable organizations during 2021.
Cash contributions made either to supporting organizations or to establish or maintain a donor advised fund do not qualify. Publication 526, Charitable Contributions provides details about the types of donations that qualify. Cash contributions don't include the value of volunteer services, securities, or property.
Excess cash contributions from previous years, which are usually eligible deductions for itemizers, are not included in this expanded deduction.
Records and Forms
In order to claim your charitable deduction, proper records will be needed. This can include an acknowledgment letter from the charity or credit card receipt for contributions of cash. For a description of the recordkeeping rules for substantiating gifts to charity, see Publication 526.
Eligible individuals who itemize must make their elections for any given qualified cash contribution with their 2021 Form 1040 or Form 1040-SR.

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