WASHINGTON — Being a cheerful giver takes on new meaning this holiday season when it comes to your tax return!
“It’s real money. It can make your refund larger, and it’s stuff people are already doing anyway,” said Mark Steber, chief tax information officer at Jackson Hewitt Tax Service.
Typically, Steber said most people aren’t able to get a tax break when they donate to qualified charities because 90 percent of people take the standard deduction on their federal income tax return.
But recently Congress temporarily changed those rules for 2020 and 2021 donations.
“What it does is it allows people who take the standard deduction, which all taxpayers get to take it is an additional deduction for their charitable donations,” he said.
But Steber said this isn’t automatic. He said you will need receipts and/or documentation for those donations and you must put this on your tax return or tell your tax professional.
Then he said individuals can claim up to $300 and up to $600 for married couples who file jointly.
“GivingTuesday set a new record and that becomes kind of the opening day of the giving season,” said Woodrow Rosenbaum, Chief Data Officer for GivingTuesday
Woodrow Rosenbaum who works for GivingTuesday, the national platform that encourages charitable giving, said there wasn’t much evidence this special tax break had an impact on charities last year. But he said some people may not have known about the temporary tax break.
For this year, he said it’s still too early to know if this tax break will result in more donations, but it doesn’t hurt.
“Anything that helps incentivize giving is probably good but…People give because they’re inspired to in often at the moment,” said Rosenbaum.
Donations must be made by December 31 to qualify for this temporary tax break on next year’s tax return.
Tax experts say you can only claim donations to qualified charities. They say giving to a GoFundMe page or throwing money into a donation bucket wouldn’t count.
The IRS has a tool on its website to help you validate which charities are legitimate.
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