Was it hockey Hall of Famer Wayne Gretzky who said, "You miss 100% of the shots you don't take?" When it passed its COVID relief bill, Congress extended a special tax deduction for charitable contributions. But nonprofits are likely to miss out on some donations if taxpayers don't know about the special deduction.
The special exemption was first applied to 2020 taxes and then Congress extended it for 2021. it allows taxpayers to take a deduction for charitable contributions even if they have already taken the standard deduction on their taxes. Single filers can deduct up to $300 in donations and married couples can deduct up to $600 on their 2021 returns, but only it they make the donation by midnight, December 31st.
How important is this? Well, according to the latest figures, 87% of Americans take the standardized deduction, so they are not automatically thinking about deductions that can reduce their taxes. While it is true that the average American is already donating in excess of $300-600, it's worth noting that
That means an end-of-year appeal that educates supporters about the deduction may spur some of them to go ahead and donate. Educating donors is always a win/win for nonprofits and the people who support them!