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New $300 charitable deduction for people who don't itemize

New deduction for people using the standard deduction

Taxpayers who elect to take the standard deduction generally cannot claim a deduction for their charitable contributions. However, the CARES Act permits these individuals to claim a limited deduction on their 2020 federal income tax returns for cash contributions made to certain qualifying charitable organizations and still claim the standard deduction. Nearly nine in 10 taxpayers now take the standard deduction and could potentially qualify.

Under this change, these taxpayers can claim an "above-the-line" deduction of up to $300 for cash contributions made in 2020 to qualifying charities, 501(c)(3) organizations.

Cash contributions include those made by check, credit card or debit card as well as amounts incurred by an individual for unreimbursed out-of-pocket expenses in connection with the individual's volunteer services to a qualifying charitable organization. Cash contributions do not include the value of volunteer services, securities, household items or other property. Please note: Donations to GoFundMe and other similar crowdsourcing sites are typically not tax deductible because they are not 501(c)(3) charitable organizations.