Excess Charitable Contributions

[gailhudson]

Turbo Tax is limiting me to a maximum of $100,000 of excess charitable contributions.  The IRS says I can contribute up to 100% of my adjusted gross income (no matter what this is) to qualified charities.  How can I get around this?

[ColeenD3]

Yes, for the most part, you are not limited by AGI in 2021. However, there are always caveats.

Limit on the amount you can deduct. See Pub. 526 to figure the amount of your deduction if any of the following applies. 1. Your cash contributions or contributions of ordinary income property are more than 30% of the amount on Form 1040 or 1040-SR, line 11. 2. Your gifts of capital gain property are more than 20% of the amount on Form 1040 or 1040-SR, line 11. 3. You gave gifts of property that increased in value or gave gifts of the use of property

Qualified contributions are not subject to a limitation based on a percentage of adjusted gross income; however, certain limits may apply if your qualified contributions are more than the amount on Form 1040 or 1040-SR, line 11, minus all other allowable contributions. For details, see Pub. 526.

Pub 526 has not yet been updated for 2021.

[gailhudson]

I think I understand what Turbo Tax was trying to do in limiting excess charitable contributions to $100,000.  At the point that I received that message, it was asking if a distribution was given to charity by the financial institution.  That is not my case.  I received the distribution as cash to my bank account.  I then made the contribution to charities.  In that case, the contribution is only limited by whether it falls into the 30%, 60%, or 100% of AGI based on the category of the particular charity.  I had one 30% (Veterans Affairs).  The others were all 100%.

[caryneudahls]

For 2020, a 60% of AGI limit applied and TurboTax Premier calculated the amount over 60% in a worksheet but did NOT reduce my charitable contributions accordingly for Schedule A. As a result it figured too high a tax refund for me for the 2020 year and the IRS sent me a string of CP12 responses, delaying my refund by almost a year in the process. I had called and talked with someone at Quicken about this while IRS letters were coming every two months that stated more time was needed to resolve the matter. Quicken's guidance: file with TurboTax 2021, expecting the issue to be fixed in TurboTax 2020 by then and the charitable giving carryover to be applied to the 2021 tax year.  But any updates to TurboTax 2020 did NOT fix the problem, so the charitable giving over 60% in 2020 did NOT carryover to Schedule A for 2021 and I'm having to add the information to my tax return myself outside of the supposedly "step-by-step" assistance.  NOT what I expect from a "premier" product.