Editorial Team @ WPR CPA
Giving Tuesday - December 2020
Here’s how taxpayers can check if their charitable donation is tax deductible this year.
The arrival of the holiday season is when many people think about how they can give back.
Often taxpayers want to donate to a charity. The IRS has a tool that can help people figure out if giving to their favorite cause will also give them the gift of a tax deduction.
Tax Exempt Organization Search on IRS.gov allows users to search for tax-exempt charities.
Taxpayers can use this tool to determine if donations they make to an organization are tax-
deductible charitable contributions.
Here are some key features and functions of the TEOS tool:
➡It provides information about an organization’s federal tax status and filings.
➡Donors can use it to confirm that an organization is tax-exempt and eligible to receivetax-deductible charitable contributions.
➡Users can find out if an organization had its tax-exempt status revoked.
➡Organizations are searchable by legal name or a doing business as name on file with the IRS.
The search results are sortable by name, Employee Identification Number, state and
country. Users can also download complete lists of organizations eligible to receive deductible contributions, auto-revoked organizations and e-Postcard filers using links on the Tax Exempt Organization Search page of IRS.gov.
Here's how the CARES Act changes deducting charitable contributions made
Previously, charitable contributions could only be deducted if taxpayers itemized their deductions. However, taxpayers who don't itemize deductions may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations, known informally as the “universal charitable deduction”. The universal charitable deduction allows taxpayers who don’t itemize deductions (standard deduction filers) to take an additional write-off of up to $300 (“above-the-line”) in calculating adjusted gross income. For the purposes of this deduction, qualifying organizations are those that are religious, charitable, educational, scientific or literary in purpose. The law changed in this area due to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
The CARES Act also temporarily suspends limits on charitable contributions and temporarily
increases limits on contributions of food inventory. More information about these changes is
available on IRS.gov.
Please note that to take advantage of this deduction, the donation must be a cash donation. Also, any contribution of $250 or more at one single time will need a contemporaneous written gift acknowledgment (receipt) from the organization that received the gift.