The IRS reminds taxpayers in IR-2021-214 of a special tax deduction that was passed in the Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted last December that has been extended and included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, through the end of 2021.
The temporary law change permits individual taxpayers to claim a limited deduction up to $300 on their 2021 federal income tax returns for cash contributions made to qualifying charitable organizations during 2021 tax year, The maximum deduction is $600 for married couples filing joint tax returns. Currently, nearly nine in ten taxpayers take a standard deduction, so this provision could potentially allow them to claim the special tax deduction.
Keeping good records is key. Obtaining an acknowledgment letter from the charity before filing a return is recommended as well as retaining a cancelled check or credit card receipt for contributions of cash.
While SPS/GZ doesn’t file individual tax returns for our clients, we do keep abreast of the latest IRS news, alerts, and updates. We share information here as it becomes available. SPS/GZ is a full-service tax reporting firm that provides personalized service and exceptional support, utilizing state-of-the-art technology to create and e-file Forms 1099, Affordable Care Act tax forms, and Forms 3921 and 3922. Reach out today at firstname.lastname@example.org or call at (888)375-3049.