Form 1040 Schedule A Charitable Contributions Line 13

Forum|Forum|1 year ago
March 23, 2025
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I have large charitable contributions and I'm using using TurboTax Premier 2024 . My cash giving is slightly under 50% of AGI, and I also have a carry-over from previous years. My problem is that if I increase the amount I report for my cash giving, my total deductible amount decreases, and my tax due increases. What's going on?

To be specific, on Form 1040 Schedule A, if line 11 (deductible cash gifts) increases by $2000, then line 14 (total deductions) decreases by $2000. Its seems to me that TurboTax is not handling the amounts in lines 13 and 13 correctly. Any comments, explanations, advice??

LeticiaF1

There are limits that apply to charitable contributions, they can't be more than 60% of your AGI. Limits can also be lower depending on each situation. This is probably what your case is.

Publication 526 (2024), Charitable Contributions

wntAuthor

Yes, there are limits, and I seem to be hitting them. But I still don't understand what is going on. Here is more detail.

I have high charitable deductions. My cash donations are almost 50% of my AGI, and my cash and capital gain (stock) deductions together are over the 50% limit. I also have carry-over deductions from previous years for both cash and stock.

When I enter my cash and stock charitable deductions (Premier 2024), Schedule A will show my cash contributions on line 11 and the eligible portion of my stock contributions on line 12. Line 12 is basically the amount of contributions I can add to my cash contributions to get to the 50% limit, so lines 11 and 12 together take me up to the 50% AGI limit. TurboTax also shows on line 13 a carryover contribution, which is identical to the eligible stock contribution on line 12. Then it adds all three of those to get line 14, my total charitable deduction.

But that is double counting. The stock deduction already took me to the 50% limit, and I don't think I can take the carryover deduction in addition, but that is what TurboTax is doing.

I played around with this and removed some of my cash deductions. That means line 12 and line 13 both increase, and the result is that I can get a result where TurboTax is computing my charitable deduction to be thousands of dollars over the 50% AGI limit. And that means that if I report lower contributions, because of the double counting, my allowable deduction increases, and my tax is lower.

Is there something else going on here that I don't understand?

wntAuthor

I made up a test case you can run yourself to see the problem I am having.

Enter numbers in TurboTax that give you the following:
Income values to give AGI: 160000
Charitable donations - cash: 70000
Charitable donations - stock: 20000
Charitable contribution carryovers: from 2023
2023 30% capital gain: 10000
Other deductions on Schedule A: 10000

With those numbers, I get this on Form 1040:
Line 11 - AGI 160000
Line 12 and 14 - Itemized deductions 100000
Line 15 Taxable Income 60000
Line 16 Tax 1448

If I increase the cash charitable giving to 76000, I get:
Line 11 - AGI 160000
Line 12 and 14 - Itemized deductions 94000
Line 15 Taxable Income 66000
Line 16 Tax 2048

So as the charitable donations go up, the tax goes up. That's backwards. The problem seems to me to be in line 13 in Schedule A. It's allowing me to get a larger deduction than the 50% limit -- in fact, larger the less I give, up to a limit.

Does that seem correct? Is there something I'm not understanding? Any explanation?