If you expect to itemize deductions in 2022, you may benefit from contributions to qualified charitable organizations. Increase your charitable gift-giving at year-end. As long as you make a donation in 2022, it is deductible on your 2022 return, including charging the donation to a credit card on December 31.
The deduction limit for monetary contributions was increased to 100% of your adjusted gross income (AGI) for 2021, but the limit reverted to 60% of AGI for 2022. Nevertheless, it still provides plenty of flexibility for most taxpayers and any excess may be carried over for up to five years.
If you donate appreciated property held longer than one year, i.e., it would qualify for long-term capital gain treatment if sold, you can generally deduct an amount equal to the property’s fair market value (FMV). However, the deduction for short-term capital gain property is limited to your initial cost. Your annual deduction for property donations generally cannot exceed 30% of your AGI. As with monetary contributions, any excess may be carried over for up to five years.
Be sure to obtain an acknowledgement letter from the charity for any cash donations of $250 or more.
The CARES Act established a maximum deduction of $300 for charitable donations by non-itemizers in 2020. The special deduction was then extended to 2021 and doubled to $600 for joint filers. As of this writing, the tax break is not available in 2022.