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Old 09-22-2020, 04:32 PM   #21
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Originally Posted by RunningBum View Post
Only to a charity that meets their criteria. Maybe she gives to some smaller ones the DAF doesn't recognize.

Also, she said

I don't think a DAF can be used to get anything in return. It can't even be used to fulfill pledges, but there are probably ways around that.

At this point I'll let audrey clarify.
Yes, I was specifically talking about memberships where there are some benefits like access to a facility, or a magazine/journal, etc., but the membership cost is still allowed as a 100% charitable deduction.
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Old 09-23-2020, 06:09 AM   #22
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I don't think a DAF can be used to get anything in return.

I know almost nothing about DAFs, but I would think this is true. If something is being received, I don't see how it can be called a donation.
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Old 09-23-2020, 06:40 AM   #23
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I know almost nothing about DAFs, but I would think this is true. If something is being received, I don't see how it can be called a donation.
In the case of memberships, certain benefits are allowed, such as free access to a facility owned by the charity, or a journal/magazine owned by the charity. The membership is still 100% deductible. However, I don’t understand how a DAF could pay for such memberships.

However, if you attend a charity fundraising event say, that includes a dinner and/or entertainment, only a portion of the cost would be a charitable deduction. Same for a membership pledge drive that sends you some item. This is explicitly disallowed for a DAF.
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Old 09-23-2020, 04:46 PM   #24
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This new (re-introduced) deduction is useful for us in two ways.

1. Our Vanguard Donor-advised fund (DAF) has a minimum of $500 per donation and there are some charities we don't want to support to that level. This enables these smaller donations to be deducted.

2. For memberships (like Audrey says) where there are membership cards involved and the whole subscription amount can't be deducted, these can't be done with a DAF.
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Old 09-23-2020, 05:51 PM   #25
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So does this mean if you give the make the maximum QCD of $100K, this year you can donate$100,300 tax-free?
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Old 10-26-2020, 09:46 AM   #26
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This provision of CARES didn't really get the publicity it should have. One thing to note, from the Kiplinger Tax Letter, is that the law is vague about what it means for couples filing jointly. The $300 limit may be "per return" so a married couple filing jointly (which most do) would be eligible to deduct only $300, not $600. I did a subsequent search on this and the issue hasn't really been resolved.
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Agreed, but it is a nice gift for those of us who are using QCDs for our charitables. Doing QCDs lets us use the standard deduction which is substantially larger than the non-charitable deductions we can gather. So we make a profit on that. But there are always popcorn charitables/small checks that we can't/don't use QCDs for, so now we can deduct $300 or $600 of those.
I'm bumping this thread because the IRS has released draft instructions for the 2020 form 1040, and these instructions do limit the deduction to $300 for a married couple. The draft pub is here: https://www.irs.gov/pub/irs-dft/i1040gi--dft.pdf

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Line 10b
If you don't itemize deductions on Schedule A (Form 1040), you (or you and your spouse if filing jointly) can take a charitable deduction of up to $300 for cash contributions made in 2020 to organizations that are religious, charitable, educational, scientific, or literary in purpose. See Pub. 526 for more information on the types of organizations that qualify. A deduction can't be taken for a contribution to an organization described in IRC 509(a)(3) or for the establishment of a new, or maintenance of an existing, donor advised fund. Also, contributions of noncash property and contributions carried forward from prior years don't qualify for this deduction. See the Instructions for Schedule A and Pub. 526 for more information on those types of contributions. Enter the total amount of your contributions on line 10b. Don't enter more than $300.
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Old 10-26-2020, 10:23 AM   #27
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Agreed that it is limited to $300 for either a single or a couple, but it is odd in that most other items like tax brackets, standard deductions, etc are broadly twice the single amount for a couple.
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Old 10-26-2020, 11:59 AM   #28
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I was thinking of passing this info to a local "No Kill Animal Shelter" that is IRS recognized as 501(C)(3) status. They could really use the help so maybe they could let people know.
I just want to make sure it is alright for them. Any downsides?


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Old 10-26-2020, 12:04 PM   #29
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Great idea. No downsides.
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Old 12-18-2020, 07:28 AM   #30
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I'm bumping this thread because the IRS has released draft instructions for the 2020 form 1040, and these instructions do limit the deduction to $300 for a married couple. The draft pub is here: https://www.irs.gov/pub/irs-dft/i1040gi--dft.pdf
I did a quick-and-dirty comparison between the recently finalized version of the 2020 form to the draft version and they look alike.

Sorry for the slight thread hijack, Cathy63.....

I also want to note that most of the remaining suggestions I made to Tax Advocate Nina Olson a few years ago were adopted this time. They include moving the Estimated Tax payments from Schedule 3 to the main form, and the elimination of the annoying process of adding unposted numbers from other forms to existing numbers on the main form. Now, all imported numbers are posted first and are indented, if necessary, like before 2018.

Now if they can move the ACA Subsidy (or repayment) numbers back to the main form instead of copying them to separate schedules first...….

Another handy change was to separate the W-2 and 1099 tax withholding payments onto separate lines before adding them together. (I didn't suggest it to Ms. Olson.)
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Old 12-18-2020, 07:57 AM   #31
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I did a quick-and-dirty comparison between the recently finalized version of the 2020 form to the draft version and they look alike.



Now if they can move the ACA Subsidy (or repayment) numbers back to the main form instead of copying them to separate schedules first...….
We are only a few moves away from getting back to the old 1040 which was superior to the new booklet of forms that is filed.
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Old 12-18-2020, 08:22 AM   #32
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I realize that the 2020 H&R Block software clearly states that an update is forthcoming January 4th but the version today does not bring this special charitable deduction from the background into the 1040 Form. So it is not included.



For folks that use this software version to manage MAGI for ACA cliff (or other) purposes, be aware because the cliff is, well, a big cliff.
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Old 12-18-2020, 08:24 AM   #33
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We are only a few moves away from getting back to the old 1040 which was superior to the new booklet of forms that is filed.
Yeah, there really was nothing wrong with the 1040-EZ approach for people who have simple taxes that can fit on a postcard, while still providing a full 1040 for those of us who have more complex tax situations. I expect we'll see something like that again.
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Old 12-18-2020, 08:42 AM   #34
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I realize that the 2020 H&R Block software clearly states that an update is forthcoming January 4th but the version today does not bring this special charitable deduction from the background into the 1040 Form. So it is not included.



For folks that use this software version to manage MAGI for ACA cliff (or other) purposes, be aware because the cliff is, well, a big cliff.
Turbotax is the same. I can input the charitable contribution, but it doesn't show up on the 1040.

Also, still nothing on that stimulus reconciliation that I can see. I should be getting a few hundred more refund due to not qualifying for the full amount based on 2019 income.

This will probably be one of those years where updates continue for some time.
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Old 12-18-2020, 09:44 AM   #35
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Turbotax is the same. I can input the charitable contribution, but it doesn't show up on the 1040.

Also, still nothing on that stimulus reconciliation that I can see. I should be getting a few hundred more refund due to not qualifying for the full amount based on 2019 income.

This will probably be one of those years where updates continue for some time.
If you don't mind doing the calculation yourself, the worksheet for stimulus reconciliation is in the 1040 instructions on the IRS website. It's called "Recovery Rebate Credit" there, and the amount goes on line 30 of your 1040. You might be able to enter the credit in TurboTax manually in Forms Mode (Ctrl+2 or Cmd+2) even if they haven't implemented the worksheet yet. I don't have TTax 2020 yet, so can't verify this.

I'm guessing the charitable contribution you can enter in the TTax interview is the one that goes on Sched A. You could also try entering the $300 directly through Forms Mode. It goes on line 10b of the 1040.
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Old 12-18-2020, 12:13 PM   #36
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Yeah, there really was nothing wrong with the 1040-EZ approach for people who have simple taxes that can fit on a postcard, while still providing a full 1040 for those of us who have more complex tax situations. I expect we'll see something like that again.
This is part of what I told Nina Olson back in 2019, and how the new forms made it a lot tougher (though a little easier in 2020 for the 2019 return) for me to complete a "postcard" 1040EZ for my friend.
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Old 12-18-2020, 04:35 PM   #37
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I realize that the 2020 H&R Block software clearly states that an update is forthcoming January 4th but the version today does not bring this special charitable deduction from the background into the 1040 Form. So it is not included.



For folks that use this software version to manage MAGI for ACA cliff (or other) purposes, be aware because the cliff is, well, a big cliff.
Glad to see this CDRE. We do not itemize and I could not find a place to enter charitable donations outside of Schedule B, for non itemizezers. Now I know that the H&R Block form has not yet incorporated it. Thanks.
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Old 12-28-2020, 09:50 AM   #38
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I'm bumping this thread because the IRS has released draft instructions for the 2020 form 1040, and these instructions do limit the deduction to $300 for a married couple. The draft pub is here: https://www.irs.gov/pub/irs-dft/i1040gi--dft.pdf
Bumping this again to point out that for those planning ahead, the new relief act that includes the second stimulus payment also raises the charitable deduction to $600 for a married couple in tax year 2021. The limit for 2020 remains at $300.

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In the case of any taxable year beginning in 2021, if the individual does not elect to itemize deductions for such taxable year, the deduction under this section shall be equal to the deduction, not in excess of $300 ($600 in the case of a joint return), which would be determined under this section if the only charitable contributions taken into account in determining such deduction were contributions made in cash during such taxable year...
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Old 12-28-2020, 10:13 AM   #39
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And this special charitable deduction is for 2021 only?
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Old 12-28-2020, 10:33 AM   #40
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And this special charitable deduction is for 2021 only?
Yes, it specifically says "taxable year beginning in 2021", and it still excludes DAFs.
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