For starters, it should be said charitable giving is always a good idea for everyone in a position to do so and should not be something influenced by incidental tax benefits. There are few acts which are as rewarding and satisfying as giving one’s wealth and talents to support a good cause. The holiday season is an important time of the year for giving and a time when your giving means the most.

However, for tax year 2020, the CARES Act has made a change to the tax code which may offer some more incentive to be charitable this year. The change allows qualifying taxpayers to take a charitable deduction “above the line” of up to $300 of cash contributions ($600 for married filers). This is a great benefit for charitable taxpayers, especially those who ordinarily give without seeing any tax benefit.

Since the 2017 Tax Cuts and Jobs Act (TCJA) increased the standard deduction and revised what expenses could be itemized, many taxpayers haven’t seen a tax benefit from their charitable giving since tax year 2016. However, qualifying taxpayers whose itemized deductions don’t exceed the standard deduction ($12,400 for single, $24,800 for married filing jointly) may see a small tax benefit for their giving in tax year 2020.

This change will not have a major impact on your tax return. For example, a taxpayer filing single with no dependents and an adjusted gross income (AGI) of $60,000 might see a tax savings of $66 dollars if they claim the full $300. Yes, this saving is minor; however, anytime there is a tax deduction for something you may already be doing, it makes sense to take advantage of it.

If you have questions about this deduction or other matters regarding your 2020 tax situation, be sure to consult a KerberRose Trusted Advisor. KerberRose is no stranger to charitable giving, as we have recently wrapped up our 2020 United Way Workplace Campaign. This organization unites people, ideas and resources to help individuals in the community meet their basic needs and have equal opportunity for stability in their health, education, financial well-being and connection to the community. Consider making your charitable contribution to United Way or any number of other local organizations working to make our communities and future a better place.