A temporary coronavirus pandemic-related tax law allows married couples who file jointly to deduct up to $600 in cash donations and $300 for individual taxpayers, according to The Internal Revenue Service.
The cash contributions need to be made to qualifying charitable organizations by Dec. 31, according to Alejandra Castro, a spokeswoman for the IRS.
“The pandemic has brought many challenges for tax-exempt organizations, and we want to make sure people take advantage of this special tax deduction that’s available this year,” Castro said. “Donations to qualifying charities not only reduce people’s tax bill but also help communities in need.”
The IRS has a Tax Exempt Organization Search tool to hep help donors find a qualified charity. Most of the charities faced increased demand for services, just as charitable donations decreased during the pandemic, according to the Florida Nonprofit Alliance.
The state organization’s data shows 53% of nonprofit organizations in Florida had a decrease in unrestricted revenue forcing 49% to spend some or all of their reserve funds. Also, 38% experienced increased demand.
“Charitabale donations are vital in helping nonprofits meet this increased in demand and we hope more Floridians take advantage of this tax benefit,” said Sabeen Perwaiz, the president and chief executive officer of the Florida Nonprofit Alliance.
Cash contributions include those made by check, credit card, or debit card, as well as out-of-pocket expenses in connection with volunteering with a qualifying charitable organization.
Cash contributions don’t include the value of volunteer services, securities, household items, or other property. Contributions carried forward from prior years do not qualify, nor do contributions to most private foundations or charitable remainder trusts. Special recordkeeping rules apply.