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IRS Tax Breaks Individuals Can Claim for 2020


Did you know about 90 percent of taxpayers don't itemize, according to the IRS? However, there are still deductions they can claim. Julian Block discusses IRS tax changes for 2020 and 2021 that offer modest tax breaks to mostly everyone.

Feb 4th 2021
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Four of my 2020 columns covered changes in the rules for charitable contributions. See my piece about tax code changes from October, my article entitled “IRS offers Modest Tax Breaks for Modest Donations” from July, the May article that answered questions about itemization and charitable tax deductions and “New Deduction Strategies for Charitable Contributions," published in April.

This column focuses on changes for calendar years 2020 and 2021 that introduce modest tax breaks for most individuals. Who qualifies for these tax trimmers? Only individuals who claim the standard deduction amounts that are available to nonitemizers who don’t use Form 1040’s Schedule A.

How many taxpayers are nonitemizers? Close to 90 percent of them, says the IRS.

Previously, there were long-standing restrictions on who could claim contributions to charitable organizations like churches, schools and hospitals. Only taxpayers who used Schedule A to itemize their write-offs for donations, as well as other outlays like medical expenses, state and local income and property taxes and interest payments for mortgages on personal residences.

What happens when donors write checks to charities and then find out that the only way for them to lose less to the IRS is to skip Schedule A and become nonitemizers who claim the standard deduction? They forfeit all their deductions for contributions. Consequently, enough nonitemizers to notice decided to decrease their donations to charitable organizations.

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Replies (2)

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By Skipper50
Feb 5th 2021 09:19 EST

Perhaps taxpayers ought look to reasons other than tax deductions for their charitable giving.

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By Julian Block
Feb 5th 2021 17:23 EST

While I agree with you, there can be no two opinions about whether we live in an imperfect world.

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