Charitable Donations

[Larry S1]

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.

[Cynthiad66]

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.

[Larry S1]

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

[DaveF1006]

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

[Larry S1]

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

[Cynthiad66]

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.

[Larry S1]

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

Larry S1

[Cynthiad66]

@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.

[Larry S1]

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

[ReneeM7122]

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: 

1. Delete the $300 in the error check.
2. Then go back to Deductions & Credits and enter the contribution there, in the Donations to Charity topic.
3. 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

[Larry S1]

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

[Cynthiad66]

@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.

[flips1934]

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

[ReneeM7122]

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.

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.

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:

1. Delete the $300 in the error check.
2. Then go back to Deductions & Credits and enter the contribution there, in the Donations to Charity topic.
3. 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.

@flips1934

[flips1934]

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.