Changes in deducting charitable contributions made in 2020 due to the CARES Act

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What is the CARES Act?
In short, the CARES Act was developed in congress, accepted by the senate, and approved by the president, in answer to needs created by the financial devastation of COVID-19. (I, personally, would love to call this a bipartisan win for us little-people voters…and I think I’ll do just that, for now.)

Charity…I have strong opinions about charity based on personal experience from both sides of this coin. From the Giver side, I ‘gave’ when I ‘had’. 10% went to IL PERG. Time to the ‘Kitchen Walk’ that provided funds supporting an orphanage maintained in the U.S. Food contributions. Clothing contributions as well as purchases from 503c entities. My spouse was a ‘giver’ as well. Our children participated in volunteer work, although, at times, it may have been under parental mandate. But, to their credit, they were usually all in.

From the Receiver side, I took only when I needed. However, this changed my opinion forever. My experience brought me some recognition of a few ‘uglies’ that lurk on this side of the charitable donation system. The following is solely from my personal experience and perspective:

    1. There are those of us that use charity bins for our garbage.
      1. Think about it. We donate from our closets and cupboards stuff we won’t wear or eat. It’s out of date, damaged, stained, flawed. Let’s dare to be honest about this. Why else would we part with it?
    2. Food. Food stamps. Food pantries. Food drives. Public school free meal systems. Food. Food. Food. The utterly beautiful truth about living in the United States of America is that ‘starving to death’ does not hit the news because it’s absolutely rare. There is nothing about this blog that aims to mess that up. However, I think that ‘food pollution’ would be a worthy term for us to deploy when it comes to our systems of donation and assistance.
      1. Sugar, salt and other addictive food additives. It’s delicious. At certain levels it’s poison. We do not need to donate more sugar and salt laced foods to our already overweight, impoverished, ADD stricken and traumatized children and families on the fringe for the purpose of getting them to drink their milk and eat their vegetables. What I think is really cool about kids is that in India, kids eat Indian food. In Mexico, kids eat Mexican food. In Russia, kids eat beets…and Russian food. In the U.S. kids eat American food. Food for thought, right?
      2. Personal story: One very thin year, my children and I received a much appreciated turkey dinner donation from a well meaning food drive. I had not yet gone on food stamps. The whole idea of going on food-stamps, in my mind, was giving in to the recognition that I failed to provide for my children. It was about dignity. Pride in providing for my family. It’s a real thing. I accepted the turkey with grace and thawed it to find that someone had refrozen and donated their rancid turkey. I actually paused and considered the possibilities of cooking temperatures that might kill the bacteria and spoiled taste without making my kids sick. In the next instant I became livid. At myself. I suddenly remembered being the ‘giver’ who made such donations out of my own cupboards and closets. How horrendously thoughtless! ‘Self-serving’ disguised as ‘selfless’! I promised myself I’d never allow myself to be so insensitive and phony ever again. My donations would not serve my annual closet cleaning and check-the-good-samaritan box for appearances. So far I’ve been good on that promise.
    3. Being on the receiving end of charity also caused me to take note that ‘givers’ never asked me the most important question: “how may I help you?” The food was dropped off. My cupboards were brimming. Giver’s just throw stuff at you and call it good…literally…I was never asked. Until someone from a church actually did ask. Here were my answers:
      1. My daughters need feminine hygiene.
      2. I need a haircut.
      3. Can you help me find a way to replace the bald tires on my car? It’s not safe.
      4. I need someone to handhold me through piecing together my resume and practice interviewing. For real.
      5. I need someone to counteract my ‘I can’t’ with ‘Yes you can because, look at you! You are!’
      6. I’m overwhelmed with trama. I need a housekeeping partner to help me not over focus or underperform.
      7. I don’t want your handout. I want a job that allows me to get my kids to school and pick them up after school with time to help them with homework and teach them how to care for their environment through my example.
    4. Finally, the most disturbing thing I found about being a receiver was the charity trap. Not only was getting off food-stamps a psychological leap of trust, I found when I gained my skills as a tax preparer, the people who gave me hand-outs actually preferred to continue the handouts rather than give me work to earn it. I was stymied by this awareness. They didn’t trust I was capable…I think. They did not see me as a professional or skilled worker. Their mind-lock on me was a broken ‘charity case’. Of course, I’m assuming this because of my own behavior when I was a ‘giver’. And, I witnessed while teaching high school that when students busted a rare move from mediocrity to success, their peer group changed. It had, too. I know that, now.

So, dropping from a solid 6 figure, Married Filing Joint, status and the environmental lifestyle that goes with it to Head of Household status on food-stamps really broadened my view of charity. Hard lessons accepted and learned. Thank God.

And now, back to: Changes in deducting charitable contributions made in 2020 due to the CARES Act
Here what’s awesome: up to $300 for cash contributions made in 2020 to qualifying organizations are an ‘above the line’ deduction on anybody’s personal tax return. Yes. Above the line allows you your full standard deduction as granted by the new tax law PLUS a deduction up to $300 cash contributed to qualified charities. This is healthy giving. It is for those charities designed to help with costs like rent, daycare, employment seeking strategies, medicine cost gaps, mental health cost gaps, and more…. Scrape it together. Pass the family hat. Pick the charity and verify with a site search, phone call or email for 503c status. Pitch the cash and get the receipt. It is certainly a beautiful time of year and an especially appreciated time for giving. This year only, there is a special tax deduction in it for you, as well.

One last thing, provided wages are also tax deductible. If you can obligate wages, you path not a hand-out but the dignity of providing for oneself and family. After you make your donation, buy what you can from local and small businesses. The recent lay-offs have presented us with a fresh set of entrepreneurial spirits looking to dodge the government office.

Let’s win this.

-Karen Ault-Aboujoude, E.A., OR-LTC,
STACaccounting.com
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Karen Ault, EA
Tax Consultant, Accountant, Quickbooks Pro Adviser

Karen is an Enrolled Agent (EA) which means she is authorized by the U.S. Dept. of Treasury to represent taxpayers, business entities, and estates before the IRS in tax preparation, audits, collections, and appeals. 

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