NEW TAX RULES FOR CHARITABLE CONTRIBUTIONS IN 2020
DON’T FORGET THE CARES ACT’S SPECIAL BONUS!
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.
START THE YEAR RIGHT 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. 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. With Estate Planning The start of a new year always feels like a new chapter. It’s an opportunity to start fresh and make new goals! For many, January is the perfect time to start something new or to create a new routine. But it also comes with some not-so-fun tasks. It’s officially the start of a new tax season, and with that comes collecting paperwork and trying to remember all the pertinent details of the past year.
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!
This could result in resentment, anger, and hurt feelings — all during a time of grief.
That’s what makes an estate plan the perfect addition to your “new year, new me” routine. It organizes your wishes into one legally binding location, and it eliminates worry about the unknown. If we learned anything from 2020, it's that preparation is key. Plan for Taxes, Plan for Life As you gather pertinent documents on income, assets, and more for your taxes, you’ll also need many of those documents for estate planning. Why put all those documents away after tax season, only to have to pull them out again when you finally decide to create an estate plan? Get two things done at once by creating your estate plan during tax season so you can spend the remainder of 2021 with the peace of mind that your family and your legacy are protected. It can be uncomfortable to talk about, but estate planning is essential to ensuring your legacy is protected and your family knows exactly what you want after you pass. Get started by talking to our experts at the Law Offices of William F. Underwood, III, P.C. Call 229-888-0888.
Combined, these two simultaneous events make January the perfect month to begin estate planning!
New Year, New Plan Estate planning is a preparedness tool designed to make your life and the lives of those you love much simpler. To start, should you become incapacitated, a trusted medical power of attorney and a trusted financial power of attorney can make decisions on your behalf. This will protect your well-being and your finances. Should you pass without an estate plan, your loved ones could face the bitter task of going to court to settle where your assets will go.
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