For qualified cash contributions made in 2021 is Turbo Tax limiting the contribution by 100% or 60% of AGI? The IRS audited by 2020 return and used 60% but TurboTax used 100%. I want to make sure I don't get audited again on the 2021 return.

Your deduction for charitable contributions generally can't be more than 60% of your adjusted gross income (AGI), but in some cases 20%, 30%, or 50% limits may apply. The 60% limit is suspended for certain cash contributions.

 

In general, your donation deduction will be limited to 50% of your adjusted gross income (AGI) —unless you only give cash, in which case the limit increases to 60% of AGI. Whereas, the limit on donating appreciated assets to a qualified charities is 30% of your AGI

 

Use this link for more details:  Charitable Contributions - IRS

@sstenson66

Cynthia - are you sure about the 60% for 2021?  I have IRS publication 526 - Charitable Contributions for 2021 and page 15 indicates that for 2021 qualified cash contributions are limited to 100% of AGI.  I want to confirm the percentage Turbo Tax is using for the limit.  How can I confirm what percentage Turbo Tax is using.  I have the desktop version of TurboTax.  Thanks

Yes.  That is correct.  This is from IRS Pub 526.  TurboTax follows IRS guidelines.  See below

 

The 2021 tax year offers a special, generous allowance. Usually, individual itemizers are allowed to deduct up to 60% of their adjusted gross incomes (AGI) for cash donations to qualified charities. However, in 2021, they generally can deduct cash contributions equal to 100% of their AGI.

 

Qualified cash contributions for 2021. If you make a qualified cash contribution for tax year 2021, your deduction for the cash contribution is limited to 100% of your 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, 2020.

• • 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 based on your contribution.

Limit based on 60% of adjusted gross income (AGI) If you make cash contributions during the year to an organization described earlier under First category of qualified organizations (50% limit organizations), and you elect not to treat it as Qualified cash contributions for 2021, your deduction for the cash contributions is 60% of your AGI. This 60% limit doesn’t apply to noncash charitable contributions. See Noncash contributions to 50% limit organizations, later, if you contribute something other than cash to a 50% limit organization.

I have the desktop TurboTax and cannot find a way to designate cash contributions that qualify as 100% deductible. Can you provide how I can do that? Thanks.

Yes, all cash contributions to a 50% charity (most common type) will be reported at 100% for tax year 2021. You do not need to make an election for this tax treatment.

 

By default, TurboTax will report that you contributed an unrestricted gift to a 50% charity, which will allow the 100% deduction.