Charitable Deduction Overview
The deduction is $300 per person, meaning married couples filing jointly could deduct up to $600 without itemizing. You can deduct cash donations even if taking the standard deduction, without itemizing. The IRS reminds to donate to recognized charities.
How does the $300 charitable deduction work?
The $300 deduction is per person, so married filing jointly can claim $600 in 2021. You can deduct up to $300 in cash donations without itemizing this year. The provision allows more people to easily deduct up to $300 in donations.
Will there be a $300 charitable deduction in 2022?
Unfortunately, as of April 2022, the answer is no. In the 2021 tax year, the IRS temporarily allowed individuals to deduct $300 per person (those married filing jointly can deduct up to $600) without itemizing other deductions.
Will there be a $300 charitable deduction in 2023?
The tax break is available even if you claim the standard deduction and don’t itemize. To financially impact your taxes, you’d need over $12,550 in donations for single filers, and over $25,100 for married filing jointly.
Charitable Contribution Limits
The charitable contribution limits depend on what kind of contribution you’re making. Contributions must be made to a qualified organization. The 2023 and 2024 rules require donors to itemize their deductions to claim any charitable contribution deductions and are limited to the AGI limit of 60% for cash donations for qualified charities.
Conclusion
I wrote at the time that, while it’s a great step, the IRS needs to keep, and increase, the CARES Act’s $300 charitable deduction in years to come. Instead, it’s been scrapped entirely in 2022. The IRS can help normalize charitable spending. Donating money has always been a weak piece of my personal finance puzzle, and it’s too easy for me to come to the conclusion that it doesn’t fit at all. In the wealth accumulation phase of financial independence, I am a bit of a money hoarder when I’m not losing it on speculative ventures.