Final day to take advantage of special 2020 charitable tax break

Your Money Matters

The last day of the year typically brings a big boost in giving to area nonprofits as donors look to get their gifts in on their 2020 tax returns. This year, the CARES Act provided another tax incentive to help more people give.

“A lot of people are coming into the office today finishing up their charitable giving for 2020,” Sioux Falls Area Community Foundation President Andy Patterson said. 

New Year’s Eve is typically a big day for donations.

“With the calendar year wrapping up,  it’s a significant time frame for people thinking about their income taxes as well as the holidays and people thinking of ways they want to give back to the community, so a lot of folks are making last-minute plans and preparations,” Patterson said. 

“A lot of people wait and do some tax planning and decide which organizations to give to at the end of the year,” Tim Ness said. 

Tim Ness with Ness Tax and Bookkeeping says in 2020, even with the recent tax changes, people will be able to deduct up to $300 of cash donations to charities.

“Because of that doubling of the standard deduction, most folks aren’t able to itemize, so that’s what makes it so important this year that folks will be able to get some tax benefit from their charitable contributions,” Ness said. 

While $300 may not seem like a lot to some people, it is an added incentive to help more people give during this difficult year.

“As we all know, covid has probably hit a lot of individuals and companies in 2020 so for this year, the government and IRS have taken some steps to encourage giving to the charitable organizations because charitable giving might be down,” Ness said. 

Patterson says giving has been steady this year, but the biggest challenge many nonprofits face is the increase in need.

“There’s a lot of need out there right now; there’s a lot of folks in our community that have a tough go in any year, but especially this year, so it’s a great time to reach out and help our neighbors that we care about,” Patterson said. “Obviously 2020 is an infamous year, so the need has been really great and we’ve seen so much generosity from individuals stepping up to meet the needs.”

If you’d still like to donate yet this year or need to donate more to take full advantage of the $300 deduction, you can give online until midnight New Year’s Eve or make sure a check is mailed and postmarked with 12/31/2020.

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