- If you made cash donations to eligible charities in 2021, you might qualify for a tax deduction.
- Eligible individuals can deduct up to $300, and eligible couples can deduct up to $600.
Don't miss this charitable donation tax deduction worth up to $300 per individual.
As you begin to prepare your 2021 taxes, make sure you carefully review your return and consider all deductions and credits that apply to you. After all, taking extra care when doing your taxes can help you maximize your tax refund or help you get a bigger tax break. If you made eligible charitable donations in 2021, you might qualify for a $300 deduction.
Donating to charity is a great way to give back and support organizations making a difference. But some taxpayers who donate their money may also qualify for tax deductions. These deductions can reduce your taxable income.
Typically, U.S. taxpayers must itemize deductions to claim deductions on donations made to charitable organizations. If you itemize, you can deduct up to 60% of your adjusted gross income. However, many Americans don't itemize their deductions -- so they don't usually qualify for charitable donation deductions.
But there's some good news. For the 2021 tax year, there is a way for taxpayers who don't itemize to benefit from charitable tax deductions.
Each taxpayer can deduct up to $300 for the 2021 tax year
The CARES Act included a special tax provision for the 2020 tax year, which allowed individual and joint filers to deduct up to $300 on donations made to eligible charities.
The Taxpayer Certainty and Disaster Tax Relief Act of 2020 extended this tax provision for the 2021 tax year and made an update that benefits joint tax filers.
For the 2021 tax year, you can deduct up to $300 per person for eligible charitable donations. That means a married couple filing together could deduct up to $600 of donations.
This provision applies to all taxpayers, regardless of whether they itemize.
Here's what you need to know
If you want to take advantage of this deduction, donations must have been made to a qualified charity and must have been made during the 2021 tax year.
Additionally, donations must have been made in cash. This includes those made by check, credit card, or debit card. It also includes amounts incurred by individuals for unreimbursed out-of-pocket expenses for volunteer activities through a registered charity.
Keep in mind cash contributions don't include household goods or other property or the value of volunteer services.
Don't miss out on this tax deduction. Individuals could deduct up to $300 of donations, and couples filing their returns together can deduct up to $600.
It's time to file your tax return
It's tax season, which means now is the time to begin getting your tax affairs in order. If you put off starting your return until the last moment, you may rush through the process and miss valuable deductions and credits. Plus, waiting will cause you more stress.
If you feel uneasy about the filing process or don't know how to get started, you may want to use tax software. You'll be guided throughout the preparation process and will be able to submit your tax return electronically. Using software could save you time and make filing less confusing.
If you still haven't started your tax preparation, there's still time. Check out our best tax software list to find the right software for your needs.
Our Research Expert
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2023 The Ascent. All rights reserved.