by ACM Wealth
ACM Wealth Administrator
The 2017 Tax Cuts and Job Act limited the deductions for state and local income taxes (SALT) to $10,000. As a result, many taxpayers began to use the “standard deduction” as opposed to itemizing deductions for federal income tax purposes.
This further limited the benefit of charitable deductions to taxpayers given that charitable contributions could only be deducted if taxpayers itemized their deductions.
For 2020, 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.
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 (CARES) Act.
The CARES Act also temporarily suspends other limits on charitable contributions, which we discussed here a few weeks ago, and temporarily increases limits on contributions of food inventory.
As always, please reach out to your ACM Wealth Advisor if you have questions on year-end planning.
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