Treavor Dodsworth CFP®, CPA, CKA®
#120 - 2021 Charitable Contributions
In most years past, people only saw a tax break from charitable contributions if they itemized deductions. Last year this was changed so that even if you did not itemize deductions you could deduct a small amount.
In 2020, taxpayers could receive a $300 charitable deduction on the front page of their 1040. In 2021, this deduction is still in place but is increased to $600 for married filing jointly taxpayers. This is a deduction, not a credit.
I realize a $300 or even $600 deduction isn’t too incredibly significant. I did want to say though that even if in past years you did not even bother entering charitable deductions when filing taxes because you were someone that didn’t itemize, you may get some benefit this year.
This is a good time to plug Tiller Finance or other systems that people use to track cash flow. I am a big believer in tracking spending in some way. If you do this, it would be much easier to look back and see any charitable contributions that had been made.
FYI - This deduction is scheduled to go away at the end of 2021 unless it is extended again. Therefore if you are not someone who is in the habit of giving and you want to take advantage of this deduction make sure to give to a qualifying charity prior to the end of the year.
Interesting Article(s) or Video(s)
Eternal Perspective Ministries - The Tree We Don’t Often Focus on at Christmastime
I am a big fan of Christmas decorations. One of the most common decorations is Christmas trees. There was another tree that played a large (understatement) role in Jesus's life.
Thank you for reading!