How to calculate itemized deduction for a cash contribution?
Assuming the cash contribution is to a qualified charity, the taxpayer can deduct up to 60% of their AGI.
For example, if the taxpayer had adjusted gross income of $100,000 and made charitable donations in the form of cash of $70,000 during the year, and then the deduction would be limited to $60,000 ($100,000 x 60%).
So what happens to the portion that is not deductible. Well, there is good news for the taxpayer! The remaining $10,000 can be carried forward for the next 5 years.
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