topic Re: Charitable Donations in Deductions & credits

Charitable Donations

Larry S1 — Tue, 16 Feb 2021 18:23:37 GMT

We made a transfer of stock donation to a Charitable Foundation which will allow us to itemize deductions for 2020. (Approximately double the amount of the standard deduction for a married couple filing jointly) In addition there were other donations of items/goods and cash to other organizations. The amount of total donations is less than 50% of AGI. Why is only a portion of the total donation showing up on Line 14? Approx 85% of the total donation appears on Line 14. We did a similar transfer last year and 100% of the donation amount was applied. Appreciate any help/advice.

Re: Charitable Donations

Cynthiad66 — Tue, 16 Feb 2021 18:49:10 GMT

Yes. There is a problem with the Contributions section of the Itemized deductions and also the above the line $300.00 deduction. Because of the many changes due to the CARES Act, IRS is still developing the forms and publications on this issue. Last update was January 13th where everything is still in draft. Once IRS finalizes the forms, we will be able to update TurboTax to accurately reflect your Contributions deduction.

Re: Charitable Donations

Larry S1 — Wed, 17 Feb 2021 00:48:20 GMT

Cynthia, is there a time line when the IRS must have this completed? How will you (or I) be notified when the changes are made? Thanks for your help.

Larry S1

Re: Charitable Donations

DaveF1006 — Wed, 17 Feb 2021 00:55:50 GMT

At this time, there is no timeline when the IRS will release the final update.

Re: Charitable Donations

Larry S1 — Wed, 17 Feb 2021 22:25:07 GMT

Will Turbo Tax advise when this has been resolved? What is the best way to determine when everything is updated and ready? Thanks.

Larry S1

Re: Charitable Donations

Cynthiad66 — Thu, 18 Feb 2021 00:14:17 GMT

No. We do not have an estimated date but check back occasionally to see if the update have been made.

There is a problem with the Contributions section of the Itemized deductions and also the above the line $300.00 deduction. Because of the many changes due to the CARES Act, IRS is still developing the forms and publications on this issue. Last update was January 13th where everything is still in draft. Once IRS finalizes the forms, we will be able to update TurboTax to accurately reflect your Contributions deduction.

Re: Charitable Donations

Larry S1 — Mon, 22 Feb 2021 17:11:54 GMT

Just checking back to see if the updates have been received/entered. Thanks for your help!

Larry S1

Re: Charitable Donations

Cynthiad66 — Mon, 22 Feb 2021 22:16:14 GMT

@Larry S1

Yes. There continues to be an issue with the contributions deduction and TurboTax is working to fix it. We do not have an estimated date of correction, at this time. I suggest you check back often to see if the correction has been made.

- Contribution is not fixed yet. Normally, you would be notified by email when there is an update that can correct your return. I will be notified internally when there is a fix.

There are quite a few updates and new tax law to implement but, I did notice that they are knocking them out daily. Please continue to be a little patient while we take care of these issues.

Re: Charitable Donations

Larry S1 — Fri, 26 Feb 2021 15:56:31 GMT

Just a quick check to see if the IRS has completed/sent the Charitable Donations update. Please see messages below. Thanks for your help.

Larry S1

Re: Charitable Donations

ReneeM7122 — Fri, 26 Feb 2021 19:40:52 GMT

There's no specific update regarding the charitable contributions. The CARES Act changed deducting charitable contributions made in 2020. Previously, charitable contributions could only be deducted if taxpayers itemized their deductions. However, taxpayers who don't itemize deductions may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations. For the purposes of this deduction, qualifying organizations are those that are religious, charitable, educational, scientific or literary in purpose. The law changed in this area due to the Coronavirus Aid, Relief, and Economic Security Act.

To get around the problem in TurboTax, you have to

The workaround is to delete the $300 in the error check. Then go back to Deductions & Credits and enter the contribution there, in the Donations to Charity topic. Then click Done with Donations and proceed through the screens until you get to the screen that tells you that TurboTax has added in the contribution.

The contribution will be back on Form 1040 line 10b, but it won't be flagged as an error. It only gets flagged if you enter it when prompted after you finish Deductions & Credits and the software tells you that you are getting the standard deduction. It will not get flagged if you enter it in Donations to Charity.

Please try the following workaround:

Delete the $300 in the error check.
Then go back to Deductions & Credits and enter the contribution there, in the Donations to Charity topic.
Click Done with Donations and proceed through the screens until you get to the screen that tells you that TurboTax has added in the contribution.

The contribution should appear on Form 1040 line 10b.

@Larry S1

Re: Charitable Donations

Larry S1 — Sat, 27 Feb 2021 18:41:08 GMT

Renee, please refer to my original request and Cynthia's reply. Your response is in regard to the $300 credit which is available if using the standard deduction--which we are not doing. The $300 has not come up as an option in Turbo tax when I have entered my Charitable Donations. We still have the question about why the total amount being claimed as a Charitable Donation is not being fully applied. On a preview copy of the completed forms, on Schedule A, Line 14 the word "limited" is printed. The total amount claimed on Lines 11 and 12 do not add up to what shows up on Line 14. The total amount of Charitable Donations being claimed is roughly 1/3rd of AGI. The primary donation was a stock transfer to a Charitable Foundation. We did a similar transfer in 2019 and the complete amount was applied to Schedule A. Please advise if the IRS is still working on updates for 2020 as Cynthia described above. Thanks.

Larry S1

Re: Charitable Donations

Cynthiad66 — Mon, 01 Mar 2021 17:52:35 GMT

@Larry

The Charitable Contributions deduction is still under construction. Basically, Turbotax is waiting for finalized forms from the IRS in order to accurately program in Turbotax. Sorry about the delay, however, this has been a YEAR! Thank you for your patience.

Re: Charitable Donations

flips1934 — Wed, 03 Mar 2021 23:24:49 GMT

I believe my return which had a contribution of appreciated stock was rejected by IRS due to an erroneous calculation of the allowable donation amount.

It appears this is a known problem with TurboTax. I find it difficult to understand why it has not been flagged for users in that situation.

When will the program be updated with the correction? I have a large refund due and am less than pleased I am having to wait to receive it!

Dean

Re: Charitable Donations

ReneeM7122 — Thu, 04 Mar 2021 17:13:42 GMT

There is a known issue in the software due to the CARES Act allowing non-itemizers to get a $300 credit for charitable donations in 2020. The workaround is to delete the $300 in the error check. Then go back to Deductions & Credits and enter the contribution there, in the Donations to Charity topic. Then click Done with Donations and proceed through the screens until you get to the screen that tells you that TurboTax has added in the contribution.

If you are itemizing, the workaround is to make the software stop treating you as an itemizer, which it must in order to get this $300 credit for you. Here's what to do:

Delete the $300 in the error check.
Then go back to Deductions & Credits and enter the contribution there, in the Donations to Charity topic.
Then click Done with Donations and proceed through the screens until you get to the screen that tells you that TurboTax has added in the contribution.

@flips1934

Re: Charitable Donations

flips1934 — Thu, 04 Mar 2021 18:16:34 GMT

Renee,

My issue is not with the $300 contribution matter, but with how TurboTax is calculating the current deduction of donated stock that has an appreciated value.

It appears the number calculated is not correct as the IRS has rejected my filing noting the reason was "Schedule A - Charitable Deduction Limits Hold Rule".

The "Fix it" feature gives me no direction as to what needs to be "fixed" in Schedule A, and the above donation is the only item that would trigger a limit on the amount to be deducted.

Can you provide other issues that can be a problem if my assumption about the cause for the rejection is wrong?

I see from messages from Cynthia66 that TurboTax is waiting for directives from the IRS on this issue of the limit calculation. Please let me know when that happens.

Thanks.

Re: Charitable Donations

Larry S1 — Fri, 05 Mar 2021 03:43:31 GMT

Renee, I agree with Flips 1934. The $300 deduction has never come up once I started entering "itemized" deductions. When I print a "preview" copy of my returns, Line 10B is blank. Error messages never show up.

Have you and Cynthia discussed my previous messages?? Her explanation and yours are quite different. Please advise. Thanks.

LarryS1

Re: Charitable Donations

KrisD15 — Sat, 06 Mar 2021 21:48:43 GMT

“The new "up to $300 above the line cash charity donation" is available for tax year 2020. This allows a Taxpayer to claim up to a $300 credit which is subtracted from income on the 1040 line 10c if the Taxpayer is claiming the Standard Deduction. (If you Itemize Deductions, all your donations will be listed on Schedule A.) “

TurboTax ONLINE

Click Tax Tools on the left side bar

Click Tools from the drop-down

Click the "Topic Search" box on the screen

Type or scroll down to standard deduction and exemptions

Click GO

The next screen gives you an option to change your selection from Standard to Itemized and back. You do not need to change your selection

Scroll down to the bottom of that screen and click CONTINUE

The next screen is the Charitable Cash Contributions under Cares Act screen

IF YOU ARE CLAIMING STANDARD DEDUCTION enter the amount of cash contributions you made, up to 300

IF YOU ARE ITEMIZING DEDUCTIONS enter 0

Scroll down and click Continue

Click Continue on the next screen

DESKTOP

Go to Step-By-Step input

Click Federal

Click Deductions & Credits along the top

Click “I’ll choose what I work on”

Edit or Update Donations to Charity in 2020 if needed,

Then click “Done with Charitable Donations”

Scroll down the “Your 2020 Deductions & Credits” screen and click “Done with Deductions”

Click Continue on the “Let’s Check Your Deductions and Credits” screen

Continue through the following interview questions until you get to the “Here Are Your 2020 Deductions & Credits” screen

Click Continue

If the next screen says “The Standard deduction is Right for You!” click Continue

ON THE NEXT SCREEN enter the cash contribution made in 2020 up to 300 and click Continue

if the screen reports that you are Itemizing, enter 0

Your 1040 should update

@flips1934

@Larry S1

Re: Charitable Donations

Larry S1 — Sat, 06 Mar 2021 23:14:50 GMT

Kris, see all of the previous messages and the responses Cynthia has provided. You and Renee evidently are not on the same page as her. This is not about the $300 deduction. It is about---not getting the full amount of charitable deductions being claimed. Cynthia is saying the IRS is still in the process of updating the 2020 guidelines so Turbo Tax can update your program. Is this something you and Renee agree with??

LarryS1

Re: Charitable Donations

Larry S1 — Sat, 06 Mar 2021 23:17:03 GMT

Kris--I should have added---we are itemizing deductions--not claiming the standard deduction. Again--see previous messages. Thanks.

LarryS1

Re: Charitable Donations

DaveF1006 — Sun, 07 Mar 2021 20:18:02 GMT

No, everything is working fine within Turbo Tax. I did a test scenario in my program by entering a stock donation and I was able to claim 100% of the donation. Several things may cause the discrepancy.

Perhaps you had other itemized deductions that zeroed out your entire AGI. If so, there may be a carryover or your itemized deductions for next year..
You can check this on line 14 of Schedule A. if it says limited, it means you are not able to claim the entire deduction this year but will carryover into next year.
If this is the case, you will also have a Charity Limits worksheet in your list of forms underneath your donation. Line 28 of that form will show what is being carried over into next year.
Perhaps your charity was not a qualified 100% charity. Please review this IRS link for more information.

You may deduct a charitable contribution made to, or for the use of, any of the following organizations that otherwise are qualified under section 170(c) of the Internal Revenue Code:

A state or United States possession (or political subdivision thereof), or the United States or the District of Columbia, if made exclusively for public purposes;
A community chest, corporation, trust, fund, or foundation, organized or created in the United States or its possessions, or under the laws of the United States, any state, the District of Columbia or any possession of the United States, and organized and operated exclusively for charitable, religious, educational, scientific, or literary purposes, or for the prevention of cruelty to children or animals;
A church, synagogue, or other religious organization;
A war veterans' organization or its post, auxiliary, trust, or foundation organized in the United States or its possessions;
A nonprofit volunteer fire company;
A civil defense organization created under federal, state, or local law (this includes unreimbursed expenses of civil defense volunteers that are directly connected with and solely attributable to their volunteer services);
A domestic fraternal society, operating under the lodge system, but only if the contribution is to be used exclusively for charitable purposes;
A nonprofit cemetery company if the funds are irrevocably dedicated to the perpetual care of the cemetery as a whole and not a particular lot or mausoleum crypt.

[Edited 03-7-2021|11:17 AM PST]