The Coronavirus Aid, Relief, and Economic Security (CARES) Act that was signed into law on March 27, 2020, contains the following two provisions that may impact your giving to Glendale Lutheran Church and charities during 2020:
Standard Deduction - For those taxpayers who utilize the standard deduction on his/her 2020 income tax return, a new above-the-line deduction allows an individual to deduct up to $300 of cash contributions to qualified charities, including Glendale Lutheran Church. A married couple is allowed to deduct up to $600. This new deduction does not apply to taxpayers who itemize deductions.
What is exciting about this new deduction is the ability to take the standard deduction and still deduct charitable contributions up to the $300 limit per taxpayer. Normally, charitable deductions are only allowed for those who itemize deductions. Since most individuals take the standard deduction, this new deduction is now available to the vast majority of taxpayers.
Itemized Deductions - For those taxpayers who itemize deductions on their 2020 income tax returns, charitable contributions of cash are now deductible up to 100% of 2020 Adjusted Gross Income. Normally, these cash charitable contributions are limited to 60% of Adjusted Gross Income. Please note that this new limit does not apply to gifts of appreciated securities.
Caveat: The deductions for cash contributions mentioned above must be made to public charities and cannot be made to a donor advised fund or private foundation.
Please contact your tax professional to determine how these provisions impact you.