CHARLOTTE, N.C. — A new deduction allowed by the IRS could help you get an even larger income tax refund from Uncle Sam in 2022.
The IRS recently added a new "above the line" deduction for charitable donations this year thanks to the CARES Act. That means whether a person itemizes their return or claims the standard deductions, they can take advantage of this new rule.
Let's connect the dots.
Usually, taxpayers who take the standard deduction aren't able to deduct their charitable contributions. The new law permits taxpayers to claim a limited deduction on their 2021 income tax returns for cash contributions made to certain qualifying organizations.
The new IRS deduction is $300 for single filers and up to $600 for married couples filing jointly.
Mark Steber, the chief tax information officer at Jackson Hewitt, said this could be worth about $150 on your refund in 2022.
But any donations you want to claim must be made by the end of the year as there's no guarantee the IRS will extend this benefit to 2022 contributions.
There are some stipulations you must follow:
- You have to give a cash donation to a qualified charitable organization.
- You need proof of that donation, which could be anything from a paper receipt to a text confirmation on your phone.
So keep those records in a safe place until it's time to file your taxes.
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