INDIANAPOLIS — The end of the year is the most popular time for charitable contributions, as nonprofit organizations tap into the spirit of giving that accompanies the holidays.
Some 13News viewers are wondering about social media posts claiming the IRS is now offering a bonus by allowing taxpayers to claim both the standard tax deduction and an extra deduction for charitable contributions.
Viewers asked VERIFY if the claims are true or if they are misinformation designed to trick people into giving based on a false promise of tax savings.
Can you claim both a standard deduction and get an additional deduction for your 2021 charitable contributions when you file next year's tax return?
- Internal Revenue Service
- Consolidated Appropriations Act of 2021
Yes, the IRS will allow taxpayers to claim both the standard deduction and a limited deduction for donations to qualified charities for the 2021 tax year — up to a $300 deduction for individuals and up to $600 for married couples filing jointly.
WHAT WE FOUND
One of the reasons December has historically been a great time of year for charities is not only holiday spirit, but also a final opportunity for taxpayers to seek a tax deduction by making a charitable donation.
But a few years ago, that additional incentive dissipated when Congress significantly increased the standard deduction available for taxpayers and, at the same time, eliminated or reduced other popular tax breaks for those choosing the standard deduction option.
The result: for the past several years, if you chose to take the standard deduction on your annual tax return, you could not claim a charitable deduction too.
Congress changed that at the start of the pandemic, allowing Americans to claim a deduction of up to $300 for charitable donations in addition to the standard deduction.
Now, a new rule in the Consolidated Appropriations Act of 2021's "Taxpayer Certainty and Disaster Tax Relief Act" extends and expands that deduction.
According to an IRS media release, single taxpayers who want a standard deduction can again claim a deduction for up to $300 on donations, and new for this year, married couples who file jointly can get a deduction for up to $600 in charitable donations.
It's good news for the nearly 90% of Americans who claim a standard deduction on their taxes. For people in the 22% tax bracket, the additional tax break is worth up to $66 for individuals and up to $132 in savings for married couples.
To qualify for the extra tax deduction:
- Donations must be made to a qualified tax-exempt charity. (You can find those using the IRS Tax Exempt Organization Search tool.)
- Donations must be made by cash, check, credit card or debit card. (Donations of goods and services do not qualify.)
- Donations must be made by Dec. 31, 2021.
- You must have a receipt to show proof of your donation.
The IRS advises taxpayers to pay special attention to their recordkeeping to ensure they can take advantage of the additional tax deduction.
"Usually, this includes obtaining an acknowledgment letter from the charity before filing a return and retaining a cancelled check or credit card receipt for contributions of cash," the IRS release said.