Have you heard the news? With all the changes in the financial world due to the virus, maybe this one slipped by you.
For those of you who use the standard deduction, when you fill out your IRS form 1040 for 2020, you will be allowed to write off up to $300 — cash only — from income for a charitable deduction. The definition of “charitable organization” will be specific; it appears donor advised funds and certain organizations that support charities won’t qualify. (This is not available to itemizers.)
The 2020 IRS forms have not been released yet, so this is the predicted game plan:
The IRS Form 1040 will have a new line to insert your charitable contribution. On the draft form 1040 for 2020, it is line 10b on the front of the form. It will be an “above-the-line” reduction in your income and establishes your Adjusted Gross Income (AGI). It appears, but is not yet verified, that you will get $300 per form 1040, not $600 per joint filing.
This provision also appears to only be available in 2020. Don’t count on it repeating next year. Standard deductions for 2020 are $12,400 for singles and $24,800 for joint filers.
With this provision, you can get up to $300 off your income for the year. For those of you crunching the numbers, this does not mean big bucks. But hey, it’s something, right? Consider donating it to your MOAA charities or to your local chapter’s charitable efforts.
The exact details and how all of the rules will work are not yet known. Consult your tax specialist for more details as details are released.