Stimulus Bill Includes $300 Tax Break for Charitable Giving
A $2 trillion stimulus bill was approved and then signed into law on Friday by President Trump. It is designed to help the economy during the coronavirus pandemic by providing business and individuals with much needed financial assistance. If you made less than $75,000 in 2019, you will be eligible to receive the full payment of $1,200. Couples who filed jointly and made less than $150,000 will get the maximum of $2,400. For every child in the household, you will receive an additional $500.
But there’s another benefit outlined in the bill that wasn’t previously advertised much. A new above-the-line charitable deduction was included as an incentive for those who want to donate to charities. Taxpayers will be able to claim up to $300 in cash contributions made to a nonprofit charity this year as a deduction from their gross income if they take the standard deduction ($12,400 for individuals and $24,800 for married couples filing jointly) on their 2020 tax return.
So for example if you are in the 10% tax bracket and donate $300, this provision would cave you $30. If you’re in the 37% tax bracket, then it would save you $111. Donations since January 1, 2020 will qualify, and the deduction will apparently continue into 2021 and beyond, as per Doctor of Credit. Charities had previously lobbied for an uncapped above-the-line deduction back in 2017.
Earn AA Miles When You Donate
You can also look at different offers to sweeten the deal if you plan on donating. American Airlines for example is partnering with the American Red Cross to raise funds for the COVID-19 outbreak. From now through April 30, AAdvantage® members can earn 10 miles for every dollar donated to the Red Cross with a minimum $25 donation. Let me know of any other offers that you might come across.
Charitable donations have dropped in 2018 and 2019 and charities need money now more than ever. If you have the means, then this is the best time to donate as many people are hurting both emotionally and financially. Make sure to do your research before donating. Give to a charity where a high percentage of the money donated goes to their programs instead of expenses for raising money. Charity watchdogs such as BBB Wise Giving Alliance, Charity Navigator, and CharityWatch are some of the websites that can help you find charities where your money can do the most good.