The Internal Revenue Service is reminding taxpayers of the extension of CARES Act provisions that will allow more people to easily deduct donations to qualifying non-profits like Ransom Everglades School this year.
Following special tax law changes made in 2020, cash donations of up to $300 made to Ransom Everglades before December 31, 2021 are now also deductible when individuals or married filers who file separately file their taxes in 2022 and choose the standard deduction. Joint filers may deduct up to $600. This new deduction is an additional deduction that reduces tax liability.
Also as part of the extension, individuals and corporations that itemize can deduct much greater amounts of their contributions. Individuals can elect to deduct cash contributions to Ransom Everglades worth up to 100 percent of their 2021 adjusted gross income on itemized 2021 tax returns. This is up from the previous limit of 60 percent. Corporations may deduct up to 25 percent of taxable income, up from the previous limit of 10 percent.
Details of these important changes can be found below.
This information is not intended as legal or tax advice. Please consult an attorney or your tax advisor for more information.
For Those Who Take the Standard Deduction
Following special tax law changes extended into 2021, cash donations of up to $300 made to Ransom Everglades before December 31, 2020, are now deductible when single filers file their taxes in 2022 — even when the standard deduction is chosen. Joint filers may deduct up to $600 of charitable deductions as part of their standard deduction.
Under this new change:
Individual taxpayers can claim an "above-the-line" deduction of up to $300 for cash donations made to Ransom Everglades during 2021, and joint filers up to $600.
This means the deduction lowers both adjusted gross income and taxable income – translating into tax savings.
Cash donations include those made by check, credit card or debit card. They don't include securities, household items or other property.
Ransom Everglades will provide an acknowledgement for your records.
As part of the Consolidated Appropriations Act, 2021, the IRS has extended the temporary suspension of limits on charitable contributions for those who itemize their deductions through the end of 2021.
This means that individuals can deduct cash donations made to Ransom Everglades in 2021 that are worth up to 100 percent of their adjusted gross income. And, excess contributions made in 2021 that exceed 100 percent of adjusted gross income can carry over for up to five years.
To qualify, the contribution must be:
a cash contribution
made to a qualifying organization like Ransom Everglades School (those made to supporting organizations and donor-advised funds do not qualify)
made during the calendar year 2021
Contributions of non-cash property do not qualify for this relief. Taxpayers may still claim non-cash contributions as a deduction, subject to the normal limits.
Founded in 1903, Ransom Everglades School is a coeducational, college preparatory day school for grades 6 - 12 located on two campuses in Coconut Grove, Florida. Ransom Everglades School produces graduates who "believe that they are in the world not so much for what they can get out of it as for what they can put into it." The mission of Ransom Everglades School is to provide an educational environment in which the pursuit of honor, academic excellence and intellectual growth is complemented by concern for the physical, cultural and character development of each student. The school provides rigorous college preparation that promotes the student's sense of identity, community, personal integrity and values for a productive and satisfying life, and prepares the student to lead and to contribute to society.