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Giving Tuesday: What you need to do to take advantage of the tax benefit

Yahoo Finance's Brooke DiPalma joins Alexis Christoforous to discuss how chairtable contributions this Giving Tuesday can pay off come tax filing season.

Video Transcript

ALEXIS CHRISTOFOROUS: Today is the eighth annual Giving Tuesday, a movement to encourage people to donate to charity, or volunteer their time, but what a lot of people may not realize is donating this holiday season could mean more money in your wallet come tax season, and Yahoo Finance's Brooke DiPalma is here with those details for us. Hi Brooke.

BROOKE DIPALMA: That's right Alexis. So this coming Giving Tuesday and today essentially, I spoke with several tax experts to see exactly how you can maximize your charitable contributions. And they say that these are big changes, because of the 2020 CARES Act. So in that 2020 CARES Act, there's first a $300 universal tax deduction. That means that this coming tax filing season, you will not have to itemize that. However, if you choose to donate more than $300, and those total deductible expenses, that includes those charitable contributions, in addition to your medical expenses, exceed the standard deduction based upon your filing status, that's, you know, single household income, married household income, then you do, in fact, need to itemize that.

BROOKE DIPALMA: And as you see right here, these are some of the organizations, and some of the registered, filed 501(c)(3) nonprofit organizations under the IRS that you can donate to. So keep in mind, as tax advisors mentioned to me, always keep your receipts to these charitable contributions. Always make sure to see if your company can match those charitable contributions, and be sure that they are considered religious organizations, nonprofit schools and hospitals, and organizations that we all know like Girl Scouts of the US, Boy Scouts of America, Red Cross, war veterans groups, et cetera.

ALEXIS CHRISTOFOROUS: Yeah, great tips. I know Girl Scouts of America near and dear to our hearts. I know you're a Girl Scout yourself. How does this year's Giving Tuesday differ from years past?

BROOKE DIPALMA: You know, of course, Alexis, so much has happened in this past year alone, and I actually caught up with the Chief Data Officer at Giving Tuesday, and he said to me that 2020 is just too unusual to predict. Of course normally they have predictions about what year ending will look like, but not this year. He said the recent trends, however, are encouraging, and also keep in mind, last year on this day alone, $511 million were donated on this day, and offline $1.46 billion were donated. Of course nonprofits, profits, and sectors across the board are hoping for some help, and especially those nonprofits during this Giving Tuesday. So the tax advisors are encouraging their clients to give back, and many nonprofits are relying on this day.

ALEXIS CHRISTOFOROUS: For sure. All right, Brooke DiPalma. Thanks so much for bringing us that report and to all of you, if you can, get out there and give. It's a win-win for everybody.