For the 2021 tax year, there is an increase in the deduction for charitable contributions, which is $300 for single or $600 for married filers, whether you itemize or take the standard deduction. This amount comes off your income, lowering your adjusted gross income.
Previously, you were limited to 60% of your adjusted gross income as the total amount of filing for those who claim charitable contributions. For 2021 you can claim cash contributions to qualifying organizations up to 100%. This is a temporary increase based on the need of many organizations needing assistance.
2021 Economic Impact Payments (EIP)
If you received an Economic Impact Payment (EIP), you will not need to include the payment as taxable income on your 2021 tax return or pay income tax on the payment. The EIP payment will not reduce your refund or increase the amount of tax you owe on your 2021 federal income tax return.
You may be able to claim the Recovery Rebate Credit on your Tax Year 2021 federal income tax return if you met the eligibility criteria in 2021 and:
• You didn’t receive an Economic Impact Payment, or
• Your Economic Impact Payment was less than $1,200 ($2,400 if married filing jointly for 2019 or 2018) plus $500 for each qualifying child you had in 2020.
If you need more information or want to talk about your income tax, please stop by or call DBK Tax Service, located in Bashas’ Shopping Center at Alma School and Riggs Roads. Please call 480-895-7888 to talk or schedule your tax appointment.
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