If standard deductions under the Republican tax plan go up, charitable donations could go down in 2018.
Some nonprofits are concerned that taxpayers may not be driven to donate as much if the standard deduction increases, as is proposed in both the House and Senate bills. At present, taxpayers may choose to itemize contributions to nonprofits, mortgage interest or medical expenses to lessen their tax burden in a given year.
If the standard deduction increases, there will be less incentive to itemize.
Susan Barry, CEO of the nonprofit Community Foundation of Louisville, said it’s ironic that Congress is considering changes that could hurt charitable giving during the holiday season, when many Americans give. Her organization supports philanthropy across Kentucky by linking donors with area charities.
With a higher standard deduction, some individuals who consider tax benefits when giving may have less of a reason to donate.
“I think that for those people for whom the charitable deduction is key, I think that we may find that they’re no longer giving,” Barry said.
That could have a chilling effect on institutions in Louisville and across the nation that rely on donations to serve their communities, Barry said. It could have a “disastrous effect” on social service, health and arts organizations, among others.
Barry said she would prefer to see a universal deduction for charitable giving. Republican Rep. Mark Walker of North Carolina introduced a bill in October that would allow charitable deductions for all taxpayers.
Under the current law, standard deductions in 2018 would be $6,500 for individuals, $9,550 for heads of households and $13,000 for married couples filing jointly. The House and Senate versions of the tax bill propose nearly doubling each of these. The bills also call for repealing the personal exemption and other additions to the standard deduction. For details on how the House and Senate bills differ, click here.
The two chambers are working toward reconciling the differences in their bills, with hopes of sending a version to President Trump’s desk before Christmas.
Disclosure: The Community Foundation of Louisville provides funding for “The Next Louisville,” a reporting project of Louisville Public Media.
Paul told WKU Public Radio on Thursday evening that he thinks it’s a mistake to discredit Kavanaugh’s personal life and…
One of the issues the task force aims to address is whether Kentucky law should be changed to allow pharmacists…
The Metropolitan Sewer District estimates it discharged about 572,788,056 gallons of sewage and stormwater into the Ohio River and Beargrass Creek…
U.S. Surgeon General Jerome Adams has visited the Ohio Valley on several occasions since prioritizing the opioid crisis.
Feinstein’s latest book is about the 2016 Ryder Cup competition between U.S. and European golfers. He’s appearing at U of…