The total of your church cash donations plus all other charitable contributions you make during the year typically cannot exceed 60 percent of your adjusted gross income (AGI). If it does, then you cannot deduct 100 percent of your donations in the current tax year. However, the amounts you can't deduct this year can be used as a deduction on one of your next five tax returns.
For tax years 2020 and 2021, the contribution limit is 100% of your adjusted gross income (AGI) of qualified cash donations to charities.
Also, remember that under the CARES Act, you can still deduct up to $300 in cash contributions if you claim the standard deduction.
Turbo Tax software does not seem to allow for 100% deduction for cash contributions to qualified charities. The software needs to be corrected. Also I believe if you click on something like 'Learn more' the text seems to state that only a max of 60% of cash contributions to qualified charities can be used as a deduction.
You should be able to indicate that you are choosing the 100% deduction of your contributions in TurboTax after you enter your contributions. You will see this page where you can choose the 100% deduction:
@RayW7 is correct, you cannot deduct 100% in the current year, but the unused deduction will be carried over to future years.
@RayW7 said I should be able to deduct 100% of cash charitable contributions to qualified charities for tax years 2020 and 2021 because of the CARES act.
ThomasM125 first says that there is a page where I can declare I want to take a 100% deduction for this year, but I do not see that page coming up in the Turbo Tax Premier downloaded version. And I think that 100% election should be for all cash contributions to qualified charities. ThomasM125's example gives only limited guidance on the eligible 100% charities because of an inability to get the further guidance disclosed by 'Learn More' in the page he displayed. When I click on 'Learn More' next to 'Donations to Charity in 2020' under 'Charitable Donations' in the Premier version it makes no mention of being able to elect the 100% deduction. But after entering all charities I donated to and hitting 'Done' it says I should be able to deduct 100% with certain exceptions. ThomasM125 later says: @RayW7 says there is a 60% limit for charities with an ability to carry over excess to later years but later on @RayW7 says I should be able to deduct the 100% because of the CARES act. So I am really confused on what to think now. Is this just a problem in the downloaded version of Premier? I have checked for the most recent updates and I have an updated version. When I look at the forms section where charitable contribution deductions are listed I do not get my full year 100% deduction and that amount is less than my AGI. That is my basis for my comments. Thanks if you can provide further clarification.
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.
@us00051
I am not seeing where the error check for $300 is. I am using the downloaded Premier version.
Yes, you should be able to take 100% of charitable deduction due to the CARES act. There is a known issue that produces the message, Charitable contributions has an unacceptable value." Try these steps:
If the error persists, then go through the next work around.
Here is the second work around for claiming the Charity Deduction:
Now the deduction should appear on Line 10B and in the Charitable Contributions screen.
How the CARES act changes 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.
Keep in mind, it is very important to keep records of your charitable contributions. If the IRS asks about them later, they will be denied if you don't have a record, receipt, letter, etc.
My problem is not that I am trying to deduct $300 dollars while NOT itemizing (taking the standard deduction). I have a large amount of charitable deductions and I am itemizing and it looks like TurboTax is applying a limit to the amount I can deduct. From the IRS 'The CARES Act also temporarily suspends limits on charitable contributions'. All my contributions are cash and are to institutions where there should be no limits. So is there a solution to this.
This has been a known issue but here is a workaround that has proven successful by many of our colleagues.
First, it seems like a very poor design for me to have to respond 'Yes' to whether I made charitable contributions to 30% charities to get to a screen that would allow me to designate other charitable contributions to be 100% deductible, when in fact I had not given to any 30% charities. But I did as you said and designated the charities I had given to in 2020 to be 100% charities, all of which were qualified to be designated that way. What happened surprised me. I expected to get that charitable deduction, plus the other deductions I was entitled to, applied against my AGI. This amount would have been below my AGI. But instead I came up with a total deduction that was greater than my AGI. It appears I had carryover charitable contributions from previous years that were allowed to also be deducted at 100%. That got me up to a value equal to my AGI and then I had the exact amount of my other deductions added to that, so all my deductions were greater than my AGI. My taxable income on line 15 of my 1040SR was 0. But on line 23 of the 1040SR, labeled as other taxes, there was an amount entered. This came from computations made on form 8960 labeled as 'Net Investment Income Tax-Individuals, Estates and Trusts'. The final amount of the tax computed there was also entered onto a form labeled 'Additional Taxes'. I am not sure I agree with this approach. I am not sure it was legitimate to apply carryover charitable contributions the way they were to this tax year, and am concerned by doing things that way that I lose the ability to carryover that amount for future years, especially in light of the fact I was taxed a substantial amount of 'Additional Taxes'. Could you please comment?
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. There is no 30% limit, the amount of the credit is limited to $300. 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.
Keep in mind, it is very important to keep records of your charitable contributions. If the IRS asks about them later, they will be denied if you don't have a record, receipt, letter, etc.
To make sure you get the credit please follow these steps:
If the error persists, then go through the next work around.
Here is the second work around for claiming the Charity Deduction:
Now the deduction should appear on Line 10B and in the Charitable Contributions screen.
Nobody has answered my question from a week ago. I have charitable contributions for 2020 above $300 dollars that qualifies to be deducted at 100%. The amount of my 2020 charitable contributions is above 60% of my AGI but below my AGI. Turbo tax software then seemed to allow charitable carryovers from previous years to be deducted up to the level of my AGI, which I am not sure is correct because the limit for deducting from my AGI for my previous years was 50% or 60% max. Then my other deductions, for things other than charity, was added to my charitable deductions so I had more deductions than my AGI. This did not seem correct to me. Can a TurboTax expert please comment on whether that seems correct? (I gave more detail in my previous posting. )
it depends. Let's address these questions one at a time.
I found in Publ 526 for charitable contributions the following: 'Qualified cash contributions for 2020. If you make a qualified cash contribution for tax year 2020, your deduction for the cash contribution
is limited to 100% of your adjusted gross income (AGI) minus your deduction for all other
contributions. ' But my additional deductions added to my charitable deductions exceeded my AGI, which from the previous IRS citation sounds like it should not have happened. If I can apply carryover contributions (all cash to qualified 50% charities) then the amount allowed should have been my AGI minus my other deductions.
I was concerned that I might not be able to deduct my previous year charitable donations at a 100% level because of the following citation in Publ 526 in the section about Carryovers: 'Contributions you carry over are subject to the same percentage limits in the year to which they are carried. For example, contributions
subject to the 20% limit in the year in which they are made are 20% limit contributions in the year
to which they are carried.' That statement would have made me think I could not apply previous year charitable contributions to this year because for this year my 2020 charitable contributions already exceed 60% of my AGI, the maximum percentage allowed in any previous year. Once again, if you could please comment I would appreciate it.
You can deduct 2020 charitable contributions at 100% instead of 60% of your AGI, and the carryover from the previous year is limited to the limitation that was applied in that year.
Temporary Suspension of Limits on Charitable Contributions
In most cases, the amount of charitable cash contributions taxpayers can deduct on Schedule A as an itemized deduction is limited to a percentage (usually 60 percent) of the taxpayer’s adjusted gross income (AGI). Qualified contributions are not subject to this limitation. Individuals may deduct qualified contributions of up to 100 percent of their adjusted gross income. A corporation may deduct qualified contributions of up to 25 percent of its taxable income. Contributions that exceed that amount can carry over to the next tax year. To qualify, the contribution must be:
Contributions of non-cash property do not qualify for this relief. Taxpayers may still claim non-cash contributions as a deduction, subject to the normal limits.
The Coronavirus Tax Relief and Economic Impact Payments page provides information about tax help for taxpayers, businesses, tax-exempt organizations and others – including health plans – affected by coronavirus (COVID-19).
I checked the link you provided but could not find any information that directly addresses my concerns. I am not sure I can deduct at a 100% level my carryover charitable contributions that were cash to qualified 50% limit organizations. I can not find anything in IRS publications that directly addresses that, but I was worried that the IRS citations from my previous post would forbid that. The TurboTax software appears to be allowing me to deduct my charitable carryover at a 100% level, but I would have thought the software would have allowed me only to deduct up to my AGI minus the other deductions I am able to take. The Turbo Tax software is deducting my carryover to the level of my AGI then adding on my other deductions so I have more deductions than my AGI. Thus I am concerned I am using more of my charitable carryover than I need to, and will 'lose it' for future years.
it depends. This is one of the drawbacks in claiming 100% charitable deductions up to your AGI because it doesn't take in to account your other deductions you may have. As a result you have more deductions than AGI, which puts you in a disadvantage position taxwise. instead, you may wish to declare that would rather take the standard Charity.60%/50%
To do this, edit each of your charities. As you scroll through the entries, Turbo Tax recognizes your charitable deductions have reached that 100% AGI the 60%/50% Charity. I will show you a screenshot what that looks like below. Enter this both ways in your return to see which is advantageous to you taxwise. note, if you are using the software, you can go to the forms mode and mark this directly on the charitable donation worksheet at the very bottom of the page. Here is the screenshot.
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The screenshot appears to be for online version. I do not see a similar solution in TT Premiere Desktop. Please advise for those using desktop versions.
As you outline the CARES act allows 100% for certain donations. The question is why does TT desktop version not seem to be accommodating this? The online version appears to have a solution but I do not see a similar solution in TT Premiere Desktop. Please advise for those using desktop versions.
It depends. If you are using TT Premier, you can enter the information right on the worksheet.
I made a donation to my church on 12/31/2020 but they didn't post it until Jan 4th 2021. Can I deduct the amount given for 2020 tax purposes?
Where in IRS 526 does it show that I can deduct 100% for 2020 and 2021
IRS reduced my refund after I filed using Premier Turbo Tax that allowed the 100% of Adjusted Gross Income
Charitable Contributions page 15
Qualified cash contributions for 2020. If you make a qualified cash contribution for tax year 2020, your deduction for the cash contribution is limited to 100% of your adjusted gross income (AGI) minus your deduction for all other contributions. A qualified cash contribution must meet the following criteria.
• It is a charitable contribution paid in cash or by check after December 31, 2019.
• It is paid to an organization described earlier under First category of qualified organizations (50% limit organizations) (other than certain private foundations described in section 509(a)(3)).
• The taxpayer elected to have this limitation apply to such contribution. Exception. Qualified contributions don’t include a contribution to a segregated fund or account for which you (or any person you appoint or designate) have or expect to have advisory privileges with respect to distributions or investments.
The limit was raised to 100% under Section 2205 of the CARES Act for qualified contributions then extended by the Consolidated Appropriations Act (CAA).