While the COVID-19 pandemic continues to affect everyone this year, there are ways your tax deductions can go even further for nonprofit organizations like the American Legion Auxiliary and the American Legion Auxiliary Foundation.
Earlier this year, Congress passed the Coronavirus Aid Relief and Economic Securities Act – also known as the CARES Act. This is the third COVID-19 related bill enacted by Congress, and it includes significant tax relief and charitable giving benefits. Sections 2104 and 2105 provide incentives for donors to support charities during this pandemic.
Here is what you need to know:
- Universal deduction
The CARES Act makes a new charitable deduction – called the universal deduction – which will be used on 2020 tax forms. This allows for a deduction of up to $300 per individual. It is an above-the-line contribution that deducts from the taxpayer’s income, before the adjusted gross income is calculated.
- Increased deductions
In addition, the CARES Act provides incentives for both individual taxpayers and corporations. For the individual who itemizes their deductions, 100 percent of their adjusted gross income is deducted for qualified charitable contributions. Corporations receive 25 percent in deductions from their taxable income.
- Cash donations only
Know that sections 2104 and 2105 of the Act refer to cash donations only. Any in-kind gifts and gifts made to Donor Advised Funds do not apply to these new changes.
The American Legion Auxiliary needs your help to continue serving veterans, military, and their families during this time. Please visit www.ALAforVeterans.org today to see how you can support the mission – and receive additional taxable income deductions.