... continued from Cover
country, starting up a business, or writing a book, getting that first rough idea will help you in the long run. Even with the pandemic, you can still plan. If you want to travel, now might be the perfect time to start saving, so that when traveling restrictions are lifted, you don’t have to worry about money. To get started, set some time aside to think about what your dreams are and start on a plan. I know that’s easier said than done. I have a hard time getting some free time in my own schedule, but what I’ve found that helps is to actually account for that planning. If you use a scheduling app, or even Google Calendar, to keep your day straight, open it up and find some time where you aren’t so busy. That could be in a week, even two weeks — no matter when that gap in your schedule is, jot down some time so you can plan for your dreams. Even if you can only spend 5–10 minutes on it over several days, it’s still better than no planning at all. The thing about dreams is that they aren’t overnight successes. Dreams like these can happen, but they are very rare. Usually, to accomplish things, it takes time and effort. All dreams can evolve from a figment of an idea and become a reality; all it takes is that first step.
As we enter into 2021, I want to encourage everyone to rekindle their dreams and make them shine.
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!
2 • swbwlawfirm.com
Made with FlippingBook Proposal Creator