Why does turbotax limit the amount of charitable deduction to 60%. I thought that limit was lifted for this year if you want?

[ReneeM7122]

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.  

According to IRS:

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: 

• a cash contribution;
• made to a qualifying organization;
• made during the calendar year 2020

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).

[us00051]

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. 

[DaveF1006]

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.

 

.

[paultrue77]

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.

[paultrue77]

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.

[DaveF1006]

It depends. If you are using TT Premier, you can enter the information right on the worksheet.

1. Open your Turbo Tax program
2. Go to the forms mode
3. on the left-hand side, choose Charitable Organization(XXXX
4. Scroll to the bottom of the worksheet and in the charitable organization questions, select 50% Charity, 100% Donation.  Here is a screenshot on what this should look like.

[sparkyMike1]

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?

[pugmirerh]

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

[Cynthiad66]

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.

[4SSparky]

The limit was raised to 100% under Section 2205 of the CARES Act for qualified contributions then extended by the Consolidated Appropriations Act (CAA).  

https://www.mcbrayerfirm.com/blogs-estate-planning-blog,cares-act-charitable-contribution-extended#:...).

[DaveF1006]

This has been a known issue but here is a workaround that has proven successful by many of our colleagues.

1. Open or continue your return.
2. Select Personal (or Federal) and then Deductions & Credits.
3. Scroll down to Charitable Donations and next to Donations to Charity in 2020, select Update/Edit/Revisit.
4. On the Review All Your Charities screen, select Done with Charitable Donations.
5. Select Yes on the Donation Limits screen.
6. Select 100%/50% Charity on all applicable donations and Continue until completed for each donation.
7. Once complete, line 14 of Schedule A will reflect the appropriate deduction amount.

[smith22101]

We itemized our 2020 deductions.  We entered all cash and non-cash contributions into ItsDeductible and imported them into TurboTax,  Our cash contributions were almost 100% of AGI, and TurboTax (Windows Deluxe Download) correctly carried them to line 11 on Schedule A at the full amount.  We filed electronically on Feb. 19 with all TT updates installed.

     We received a letter from the IRS that reduced our charitable deductions to 60% of AGI.  We conclude that it was because TurboTax did not enter "Qualified Cash Contributions [$amount]" on the dotted line on Line 11, Schedule A, as instructed in the IRS Schedule A Instructions to indicate our election to use the 100% limit exception allowed by the CARES Act for 2020 filing.  We think there's a bug in TT.  We've tried repeatedly to discuss this with someone on the technical team, but can't reach anyone.  We sent an express letter with back-up documentation to Turbo Tax at Intuit headquarters on May 13.  We're waiting to hear a response.

[nedfarinholt]

"For tax years 2020 and 2021, the contribution limit is 100% of your adjusted gross income (AGI) of qualified cash donations to charities." My turbotax took advantage of this apparent change but the IRS rejected it. I am told by others that this change only applies to "50% charities." Mine were all "100% charities". My concern now is that my file copies of Turbotax 2020 will not properly calculate my carry over for my 2021 taxes.

[Mike9241]

see the info on this IRS website as shown in part below.     it's possible that the IRS is in error.

https://www.irs.gov/publications/p526#en_US_2020_publink100065920 

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.

First category of qualified organizations (50% limit organizations).

The first category includes only the following types of qualified organizations. (These organizations are also sometimes referred to as "50% limit organizations.")

1. Churches and conventions or associations of churches.

2. Educational organizations with a regular faculty and curriculum that normally have a regularly enrolled student body attending classes on site.

3. Hospitals and certain medical research organizations associated with these hospitals.

4. Organizations that are operated only to receive, hold, invest, and administer property and to make expenditures to or for the benefit of state and municipal colleges and universities and that normally receive substantial support from the United States or any state or their political subdivisions, or from the general public.

5. The United States or any state, the District of Columbia, a U.S. possession (including Puerto Rico), a political subdivision of a state or U.S. possession, or an Indian tribal government or any of its subdivisions that perform substantial government functions.

6. Publicly supported charities, defined earlier under Qualified Conservation Contribution .

7. Organizations that may not qualify as "publicly supported" but that meet other tests showing they respond to the needs of the general public, not a limited number of donors or other persons. They must normally receive more than one-third of their support either from organizations described in (1) through (6), or from persons other than "disqualified persons."

8. Most organizations operated or controlled by, and operated for the benefit of, those organizations described in (1) through (7).

9. Private operating foundations.

10. Private nonoperating foundations that make qualifying distributions of 100% of contributions within 2½ months following the year they receive the contribution. A deduction for charitable contributions to any of these private nonoperating foundations must be supported by evidence from the foundation confirming it made the qualifying distributions timely. Attach a copy of this supporting data to your tax return.

11. A private foundation whose contributions are pooled into a common fund, if the foundation would be described in (8) but for the right of substantial contributors to name the public charities that receive contributions from the fund. The foundation must distribute the common fund's income within 2½ months following the tax year in which it was realized and must distribute the corpus not later than 1 year after the donor's death (or after the death of the donor's surviving spouse if the spouse can name the recipients of the corpus).

we can't see your return. if you believe the IRS is wrong then Turbotax offers through a partner

The Audit Defense service is provided by TaxResources, Inc., also called TaxAudit.com, in partnership with TurboTax. If you paid for Audit Defense and you received an IRS notice, call TaxResources, Inc. at 877-829-9695, or report your IRS notice on their web site at http://intuit.taxaudit.com/. Do not contact the IRS until you have spoken to TaxResources. They may contact the IRS on your behalf.

[RRHLMF20041040]

Thanks to all the experts helping out on this.

I use the desktop version of TT premier. I manually checked the 50/100% boxes. The full amount of my deductions (up to 100% of AGI) showed up on Schedule A. TT DID NOT make the notation on the dotted line of Schedule A line 11 as Publication 526 calls for. The 100% deduction carried forward to Form 1040 and I had zero taxable income. I got the same letter from IRS limiting my deduction to 60%.  The question is, what do I do now? Do I need to file an amended return? Will TurboTax lead me through that?  I did not sign up for the TT audit support.   Thanks a million for expert replies.