Donate to Disaster Relief and Save on 2020 Taxes
November 23, 2020
This year, thanks to the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the money you donate to nonprofits gives you more tax relief. Consider using this one-time opportunity to support the mission of All Hands and Hearts to address the immediate and long-term needs of communities devastated by natural disasters.
It is no revelation to say that 2020, and especially the COVID-19 crisis, has been challenging for all of us: parents, teachers approaching retirement, full-time service workers trying to make it in the arts, nonprofits focused on major disasters. One thing that has provided some relief is the CARES Act. The CARES Act provided many with funds from the federal government earlier this year — but also tax relief specific to 2020.
If you’re anything like me, you feel a little anxious come tax season. I’ve been using tax preparation software to do my taxes for years, but I still worry about answering the questions incorrectly. The one that makes me most nervous is always: “Do you want to itemize your deductions or do you want to take the standard deduction?” We are here to explain these questions and how the CARES Act has provided individuals with tax relief.
HERE’S WHAT YOU NEED TO KNOW
Do you take the standard deduction?
You may give to nonprofits every year, but unless you have items like a mortgage and you can claim interest, it isn’t worthwhile to itemize deductions. Often, even with student loans and other education expenses, total charitable contributions may not be enough to count. However, if you give to nonprofits this year, you can deduct up to $300 from your tax returns even if you take the standard deduction. This will reduce your taxable income (similar to the way health insurance and 401K contributions reduce your taxable income).
Do you itemize your deductions every year?
Usually, deductions can be up to 60% of your adjusted gross income on taxes. The CARES Act has pushed that limit higher — for 2020 only. This year, you can claim up to 100% of your taxable income. Note: this is valid only for cash gifts, so contributions to your donor-advised fund will not qualify. Even so, you have an enormous opportunity to reduce your tax burden this year.
How can you take advantage?
- Donate what you can.
- Keep the receipts for your donations.
- Ensure that your charitable contributions qualify. For example, political donations are not deductible.
Do yourself a favor and consider donating to deserving nonprofits this year.
Why you should donate to All Hands and Hearts
All Hands and Hearts is working hard to adapt, strengthen and evolve to meet the needs of the communities we serve. In September, we launched DM12, a volunteer initiative designed to meet the unique challenges that COVID-19 presents. This adaptation of our model enabled us to get back to work, assisting communities devastated by hurricanes in Louisiana (2020), The Bahamas (2019), Florida (2018) and Texas (2017), and assisting with food distribution and free COVID-19 testing in California to address the urgent needs related to the pandemic.
As we move into 2021, we’re looking forward to increasing the support that we provide to communities disrupted by natural disasters. We will:
- Expand our volunteer model in The Bahamas and run two programs simultaneously.
- Repair and rebuild disaster-resilient schools in Mexico, Peru and the Philippines.
- Conduct on-the-ground assessments to determine how to respond effectively to recent catastrophic storms in Central America and Southeast Asia.
- Restart our Australia Bushfire Relief Program as soon as possible.
- Launch a pilot program to provide disaster preparedness and relief to communities in the United States devastated by wildfires.
When considering where to make a charitable contribution, get the best tax benefit by helping us close out 2020 and build momentum for 2021!
Thanks to the generosity of David Campbell, one of our co-founders, all donations made between November 24 and December 1, GivingTuesday, will be matched dollar for dollar up to $100,000. Each donation matched will bring relief to families whose lives have been turned upside-down by natural disasters and COVID-19.
Director of Principal Gifts, All Hands and Hearts