March 1, 2022
In early November the IRS reminded the 90% of taxpay- ers who do not itemize their deductions that they still have access to an above-the-line deduction for charitable gifts in 2021. The extra deduction was created by the CARES Act in 2020 and extended to the 2021 tax year by the Taxpayer Certainty and Disaster Relief Act of 2020— enacted last December. Single taxpayers are permitted a deduction of up to $300, marrieds filing jointly up to $600—for cash gifts to qualified charities [IR-2021-190].
When the standard deduction was doubled with TCJA 2017, making itemizing unnecessary for the large major- ity of taxpayers, there was a fear that the loss of the tax benefit might reduce American generosity. That does not appear to have happened. According to Giving USA, charitable giving by individuals rose by 2.2% in 2020, reaching $324.1 billion. That was the year of the econom- ic hardships of the pandemic, but those who could still opened their wallets wide.
