CARES Act changes deducting charitable contributions made in 2020:


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.

ACM is a registered investment advisory firm with the United States Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training. All written content on this site is for information purposes only. Opinions expressed herein are solely those of ACM, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation. All investing involves risk, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful. ©ACM Wealth