Stimulus checks are already arriving in mailboxes and bank accounts, but not everyone who receives a stimulus check needs the money. Part of the recent CARES Act, these stimulus checks include $1,200 for single filers or $2,400 for joint filers, plus $500 for each dependent child under age 17. The amount of the payment is calculated based on your 2019 adjusted gross income, or your 2018 tax return if 2019 has not yet been filed. The stimulus check amount begins to reduce once the taxpayer’s adjusted gross income reaches $150,000 for joint filers, $112,500 for heads of household, and $75,000 for all other filers. Since the payment is in the form of a rebate, it will not be subject to income tax. In addition, it’s treated as an advance credit against 2020 income, so there will be a “true-up” based on the actual 2020 tax filing. As such, those whose 2020 income is lower than 2018 or 2019 may get an additional rebate. No repayment is required if excess rebates are issued.
Charitable giving is needed now more than ever. If you find yourself in a financially secure position, and would like to make a tax-deductible donation to an organization, here are some things to consider:
- Donations to qualified charities are tax-deductible if you itemize deductions on your tax return. Are you not planning on itemizing in 2020? The CARES Act also has provisions on charitable giving that allow you to claim an above-the-line deduction of up to $300 on your tax return. (Contributions to supporting organizations or donor-advised funds are not eligible for the $300 above-the-line deduction.)
- For your donation to qualify for a tax deduction, you must donate to a charity or nonprofit that is eligible to receive tax-deductible charitable contributions. Not sure if your charity of choice is a qualified organization? You can look up eligible organizations on the IRS’s Tax Exempt Organization Search.
- Your donation can be made by cash, check, or credit card, but you must get a record of the donation. This record may be provided by the charity or nonprofit in the form of a receipt, email, or letter detailing the amount and date of your donation.
- Donating money to a family or individual does not qualify as tax-deductible.
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