The Tax Cuts and Jobs Act (TCJA) of 2017 included a significant increase in the standard deduction. Individual tax filers can choose to reduce their taxable income by either taking the standard deduction or itemizing deductions. As a result of TCJA, the majority of individual filers choose the standard deduction. This typically means that most people are not allowed to deduct charitable contributions.

The 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act included a special allowance for charitable cash contributions claimed on 2020 and 2021 tax returns. It allowed tax filers to deduct a charitable contribution, even if they do not itemize. For 2021, a married couple filing jointly and taking the standard deduction can deduct up to $600 of charitable cash contributions and single filers up to $300.

Cash contributions include donations paid by check and credit cards. It also includes unreimbursed out-of-pocket expenses in connection with an individual’s volunteer services to a charitable organization. Cash contributions don’t include the value of volunteer services, securities, household items or other property.

Additional Information

The IRS web site www.IRS.gov has a Tax-Exempt Organization Search Tool that enables you to search for qualified charities at https://www.irs.gov/charities-non-profits/tax-exempt-organization-search

Information about 2021 tax brackets and the standard deduction is available on the Tax Foundation web site https://taxfoundation.org/2021-tax-brackets/

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