You can write off cash donations on your 2021 taxes

Photo by Markus Winkler on Unsplash

If you donated at all this holiday season or at all this year you could get a tax write off for helping people. The IRS has a temporary rule that allows more people to deduct a cash donation to qualifying charities on their 2021 federal income taxes.

For those who itemize this is not new you have always been doing this but for those of who are nearly 85% of taxpayers who take the standard deduction this new rule says married couples filing jointly can write off up to 600 dollars in cash donations and individual taxpayers can deduct up to 300 dollars cash donations. This deduction could be on top of your standard deduction and taking this deduction could adjust your gross income and taxable income.

This temporary rule was continued through the American Rescue Act and will not continue into 2022 unless Congress passes another law.

When filing your 202 taxes you can take the standard deduction you will also see line 12B on your tax form and that is where you can put your cash donation deductions.

Before making any cash donations to a charity there are four rules you need to follow.

One: If you want to claim a cash donation it must be made to a qualifying charity

To look up if the charity you want to donate to is a qualifier under this rule. You can go to the tax exempt organization search tool on IRS.gov and you can look it up from there.

Second: Meet the deadline

Any donations you want to qualify for this rule must be made before December 31st of this year for it to qualify for your 2021 tax return.

Third: Documentation

If you make a cash donation make sure you have a document from that charity to prove your donation or you also can use a cancel check. That way if for some reason you need too, you can prove that donation to the IRS at tax time.

Fourth: Scams

If you do decide to give, make sure you aren’t getting scammed because there are a lot of scammers out there.

The holidays are a great time to give and charities across the country have seen dramatic decreases in donations since the beginning of the pandemic.

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Every week hosts of BBP News Podcast Chris Baker and Nick Rodd write about all current events from politics, technology, business and sports news.

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BBP News

BBP News

Every week hosts of BBP News Podcast Chris Baker and Nick Rodd write about all current events from politics, technology, business and sports news.

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