Most people no longer get a tax deduction when they donate to charity. That shouldn’t keep you from making donations, but you may want to change your approach.
Typically, only taxpayers who itemize deductions can write off charitable contributions. The vast majority of taxpayers instead take the standard deduction, which was nearly doubled by the Tax Cuts and Jobs Act of 2017. (Temporary provisions in pandemic relief legislation allowed taxpayers to deduct $300 of their donations in 2020 and 2021 without itemizing, but those provisions have expired.)
It has never made sense to donate solely to get a deduction. If you’re in the 22% federal tax bracket, for example, you save only 22 cents in taxes for each dollar you give away. If you’re charitably minded, however, there may still be ways to get a tax break for your generosity with some planning, or you could reconsider how you give money away. In my latest for the Associated Press, learn new rules for charitable giving.
Today’s top story: How the pandemic disrupts holiday travel. Also in the news: A new episode of the Smart Money podcast on charitable giving and using your savings to pay student loans, how to insure an expensive present, and how to plan for the end of student loan forbearance.
