FAQ: Charitable Giving and Your Taxes (a late 2020 refresher)
28 December 2020
This blog post was originally published on whoiscarter.org in April 2020. It has been updated here to reflect our supporters’ needs as we transition from 2020 into 2021.
The Coronavirus Pandemic has affected all aspects of life in 2020, including charitable giving and how we report those charitable gifts on tax returns. Here are a few clarifying questions and answers to support you as you navigate filing your 2020 taxes and reporting your 2020 charitable gifts in the coming weeks.
Q: What is the deadline to file my 2020 tax return?
A: As of the publication of this blog post, the deadline for individuals to file and pay federal taxes for 2019 is April 15, 2021. However, we recommend checking the IRS website regularly for updates in early 2020. If the IRS does extend its deadline like it did in 202, be aware: State and municipal tax deadlines may not necessarily be extended; you should check with your state and city’s revenue department to find out if the date to file state and city tax returns has been extended, or if you will still owe those taxes on April 15.
Q: Is my 2020 donation to Who Is Carter tax-deductible?
A: The Who Is Carter Foundation is a 501(c)(3) nonprofit organization, which means that your donations to the Foundation qualify as tax-deductible. If your donation was not exchanged for goods or services, it is 100% fully tax-deductible.
THE CARES ACT HAS MADE CHARITABLE GIVING EASIER IN 2020
by including an above-the-line deduction for total charitable contributions of up to $300 in 2020.
Q: Is my 2020 non-cash gift fully tax deductible?
A: If you donated property (i.e. a vehicle, land, or anything that is not money), you may generally deduct the fair market value of the property. If the property has appreciated in value, however, some adjustments may have to be made.
The rules relating to how to determine fair market value are discussed in IRS Publication 561, Determining the Value of Donated Property. By law, the Who Is Carter Foundation cannot tell you what your non-cash donation is worth. To assess the fair market value of your donation, consult a local tax advisor who should be familiar with market values in your region, and review IRS guidelines.
Q: I made a contribution in 2020, but I do not have a receipt from Who Is Carter as a record of my contribution. How can I obtain a receipt?
A: Just send an email to Allison Murray at allison@whoiscarter.org that includes the date and amount or type of donation you made in 2020.
Q: Will itemizing my charitable contributions lower my 2020 tax bill?
A: It depends on whether the total of all of your itemized deductions exceeds your 2020 standard deduction. For 2020, the standard deductions are:
Single taxpayers, or married, filing separately: $12,400
Heads of households (unmarried people who support others): $18,650
Married, filing jointly: $24,800
We recommend that you consult with your tax advisor to determine which approach is to your advantage--itemizing or taking the standard deduction.
Q: Can my business deduct our 2020 charitable contributions?
A: If you are a C-Corp, then yes, you can deduct charitable contributions in most cases. If you are an S-Corp, LLC, or self-employed, then no, you cannot deduct your charitable contributions. However, S-Corp, LLC, and self-employed business owners still have the option to itemize these contributions on your personal tax return.
Q: Does the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) impact my charitable giving for 2020?
A: It does: The act includes an above-the-line deduction (universal or non-itemized deduction that applies to all taxpayers) for total charitable contributions of up to $300 in 2020. The CARES Act also raises the existing cap on annual contributions for those who itemize—from 60 percent of adjusted gross income to 100 percent. For corporations, the CARES Act raises the annual limit from 10 percent to 25 percent. Again, these changes apply to charitable contributions and tax reporting for 2020, not for 2019. (This article from the National Council of Nonprofits explains the impact of the CARES Act on the nonprofit sector in detail.)
To be clear, the Who Is Carter Foundation cannot provide tax advice, but we do want to do our part to support our donors, especially during a time when uncertainty impacts so many realms of life, including your finances. For more information on charitable giving and tax implications, please consult with your tax advisor.
We are so grateful for your donations to the Who Is Carter Foundation. Because we are a nonprofit organization, our ability to serve families depends on your charitable contributions. Your support provides resources to parents of children with neurological conditions through TheBrainPossible.com and The Brain Possible Podcast.
Thank you for your part in providing hope and possibility to so many families. We wish you and your loved ones a healthy and prosperous 2021!