Are there limits to the above the line charitable deduction in the current tax year?
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Yes, there are specific limits to the above-the-line charitable deduction for individuals who do not itemize deductions in the current tax year (2025).
Key Points for 2025:
1. Above-the-Line Deduction for Non-Itemizers
- For tax years beginning after December 31, 2025, individuals who do not itemize deductions may claim an above-the-line deduction for charitable contributions made in cash to qualified organizations (excluding donor-advised funds and supporting organizations).
- The maximum deduction is $1,000 for single filers and $2,000 for joint filers per year.
2. Qualifying Contributions
- Only cash contributions to organizations described in section 170(b)(1)(A) (such as churches, educational organizations, hospitals, public charities, and governmental units) qualify.
- Contributions to donor-advised funds or for the establishment or maintenance of such funds do not qualify for this above-the-line deduction.
3. Substantiation and Documentation
- Taxpayers must maintain a bank record or a written communication from the donee organization showing the name of the organization, the date, and the amount of the contribution.
- For contributions of $250 or more, a contemporaneous written acknowledgment from the qualified organization is required.
4. No Carryover
- If a taxpayer’s cash contributions exceed the $1,000 (single) or $2,000 (joint) limit, the excess cannot be carried over to future years for the above-the-line deduction. However, if the taxpayer itemizes in a future year, regular carryover rules for charitable contributions may apply.
5. Interaction with Other Limits
- The above-the-line deduction is separate from the itemized deduction for charitable contributions. Taxpayers who itemize are subject to the percentage-of-AGI limits and the new 0.5% AGI floor for itemized charitable deductions, but these do not apply to the above-the-line deduction for non-itemizers.
6. Summary Table: Above-the-Line Charitable Deduction for 2025
7. Conclusion
For 2025, the above-the-line charitable deduction for non-itemizers is limited to $1,000 (single) or $2,000 (joint), applies only to cash contributions to certain qualified organizations, and is not subject to AGI percentage limits or the 0.5% AGI floor that applies to itemized deductions.
If you need details on the itemized deduction limits or the new 0.5% AGI floor, please let me know.
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