Friday, September 28, 2018

How Will The New Tax Law Impact Nonprofits

    The article begins by describing the changes in tax law taking effect in 2018. These provisions are: the standard deduction doubled from $6,350 to $12,000 for individuals, and $12,700 to $24,000 for married couples. The charitable contribution deduction limit rose from 50% to 60% of an individual's adjusted gross income (AGI). The estate and gift tax exemption doubled for single filers from $5.5 million to $11 million and up to $22.4 million for married couples. The corporate tax rate has been reduced from 35 percent to 21 percent on all profits, which is 4 percent lower than the global average corporate tax rate. In theory, this should make the U.S. more globally competitive and help keep more corporate profits in the U.S. The increase in the standard deduction is expected to wipe out donations. However, decreases in individual giving may be offset by the gains of corporations, many of which have been left with extra cash because of the tax cuts. Many corporations have announced they will be giving generous donations to big nonprofits, because of these donations many local charities are worried they are going to bear the brunt of the tax cuts. To learn more about how the tax cuts will affect national and local charities, click here:



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