Registered Tax Return Preparer RTRP Practice Exam

The maximum allowable percentage for charitable contributions deduction for cash donations to public charities is indeed up to 60% of adjusted gross income (AGI). This higher limit was introduced as part of certain tax reforms to encourage individuals to contribute more to charitable organizations, particularly during times of economic hardship or crisis.

The 60% limit applies specifically to contributions made in cash to qualifying public charities, which include many nonprofit organizations that serve the public good. Donors can take advantage of this higher deduction limit, increasing the potential tax benefits for their charitable giving.

This deduction is subject to various rules and documentation requirements to verify the contributions, but understanding that the limit is 60% for cash donations to public charities helps taxpayers plan their charitable contributions more effectively to maximize their tax benefits.