The Charitable Donation screen will come up in all versions of TurboTax. Here are the steps to follow with your Online Deluxe
Click Deductions and Credits
- Select Review/Edit
- Click Edit to the right of Standard Deduction Click OK, Sounds Good
- Click Wrap Up Tax Breaks
- Click Continue
- Make sure that $300 is filled in and then click Continue
- Click Lets Keep Going
Unlike a credit (which is a dollar-for-dollar reduction in the amount of tax you owe), a deduction impacts your tax liability differently depending on your tax bracket.
For example, an individual who falls into the 10 percent tax bracket would see a $30 change as a result of this deduction. For someone in the 37% bracket, however, the charitable contribution deduction this year would be worth $111.
The CARES Charitable Donation is a deduction, not a credit. That means that your tax bill will be computed as though you had made $300 less money in 2020. Your taxes will be reduced according to the tax bracket that you are in. If your income is in the 10% bracket, then your taxes will be reduced by 10% or $300 or $30.
A person in a higher tax bracket the deduction will be higher. If a person is in the 37% tax bracket, then their savings would be $111.
Tax Credits and Deductions explains the difference between these often confused terms.
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