NEW TAX RULES FOR CHARITABLE CONTRIBUTIONS IN 2020
DON’T FORGET THE CARES ACT’S SPECIAL BONUS!
Many people tackled deep-cleaning projects while spending more time at home last year. If your cleaning spree ended in donating items to a local charity, or if you donated funds to help local organizations supporting pandemic relief, you can look forward to some tax breaks! To feel confident in claiming them, here's what you need to know about filing your 2020 taxes, including some unique additions from the Coronavirus Aid, Relief, and Economic Security (CARES) Act. ITEMIZED VS. STANDARD DEDUCTIONS When filing your taxes, you’ll need to first decide whether you want to itemize your deductions or take the standard deduction set by the IRS. Even those who cannot claim other tax credits or breaks qualify for the standard deduction. However, if you do have qualifying deductions and they add up to more than the standard deduction, it’s smarter to itemize your deductions.
Take note that the standard deduction was increased in 2020 because of the CARES Act. In 2019, the standard deduction for a single person was $12,200; in 2020, it’s $12,400. For those who are married and filing jointly, the standard deduction was $24,400 in 2019 and $24,800 in 2020. And the standard deduction for heads of household in 2019 was $18,350 and it’s $18,650 in 2020. DEDUCTIBLE CONTRIBUTIONS If you choose to itemize your deductions, almost any gift to a qualified charitable organization can be deducted against your taxable income. It’s very important to keep records of all your contributions. According to the IRS, when donating items to a local charity like the Red Cross or Goodwill, the deductible value equals the fair market value of your items.
If you made cash donations in 2020, there is a special rule to be aware of: Donations to public charities are now 100% deductible instead of 60%. However, this doesn’t apply to private foundations. AN ADDITIONAL CHARITABLE DEDUCTION If you choose to take the standard deduction rather than itemize deductions on your 2020 tax return, you may qualify for a new dedication courtesy of the CARES Act. If you donated to a qualified charity before Jan. 1, 2021, you can deduct up to $300, for single filers, or $600 per married couple. The CARES Act can save you hundreds of dollars on your 2020 tax return. Use this guide to navigate the upcoming tax season. Happy filing!
t NEED FURNITURE REPAIRED LOCALLY? I KNOW A GUY!
Just over a year ago, I got a call from a local couple who needed help with a tax problem. They were going up against the IRS and wanted an experienced tax resolution specialist in their corner — a role I was happy to take on. That couple was David and Debi Rengers, the husband-wife owners of Furniture Renaissance right here in Racine. Their business specializes in furniture repair and restoration. It opened in 1990, but the Rengers bought it in 2014 and turned it into a family affair. “David has been with the business 20 years or more,” Debi says. “He’s what they call a conservator, so he repairs the furniture and refinishes it. We also do upholstery, so he does that and I do the bookkeeping.” Furniture Renaissance has just one other employee, Justin Miller, who works with David as a junior conservator in the shop. Their team may be small, but it’s mighty. David has been working with furniture (and following in his
father’s footsteps) for almost 50 years, and he’s trained in museum-quality restoration and conservation techniques. “We handle a mix of things, and [David’s work] never ceases to amaze me. We had a chair come in once where a dog had chewed one arm quite extensively, and when my husband was finished with it you couldn't even tell which arm was chewed!” Debi says. When the Rengers called, I listened carefully to their concerns and went to bat for them against the IRS right away. “Our experience working with Paul has been excellent,” Debi says. “The IRS can be very intimidating and confusing, and he helped eliminate that confusion and set us on the right track.” I’ve enjoyed working with Debi and David, too! They do great work, and I’m always proud to help out good people and support a local business.
If you have a piece of furniture that needs some TLC because time and/or pets got hold of it, give Furniture Renaissance a call at 262-633-6040. They’ll have it looking good as new in no time!
WWW.FRANCETICTAXRESOLUTION.COM | 262-752-6992
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