Causes.com
| 11.28.17

#GivingTuesday: Will Tax Reform Reduce Your Charitable Giving?

Join us and tell your reps how you feel!

Updated - November 28, 2017: Today is an essential day in the annual contribution calendar for non-profits all over the country. It's #GivingTuesday! Countable encourages you to find an organization doing work you believe in and sending them a contribution today. And if you don't have any extra to send, that's okay. Time and attention and heart are resources, too, that you can share.

Who are you supporting today?

What’s the story?

One of the central aspects of the GOP tax reform plan that will impact most Americans is the proposed increase to the standard deduction. By doubling the standard deduction for both individuals and couples the plan disincentives charitable giving, or at least that’s what many non-profits fear. They are taking steps to reform the plan to prevent a drastic dive in annual donations.

Will a higher standard deduction reduce your charitable giving?

Why does it matter?

Quartz reports according to Giving USA, Americans contributed $282 billion to charity in 2016. An Indiana University study projects that the proposed increase to the standardized deduction — from $6,350 to $12,000 for individual filers and from $12,700 to $24,000 for married couples — would reduce annual charitable giving by $12-13 billion annually.

Currently, about 70 percent of American households take the standard deduction, rather than cobbling together a list of itemized deductions, but most of those are lower to middle-income households. For those households making at least $100,000, at least 80 percent itemize deductions.

The three top itemized deductions are state and local taxes, mortgage interest and charitable giving, and charitable giving is a useful way for taxpayers to ensure that itemizing is a better option than taking the standard deduction. Non-profits fear that with an increase to the standard deduction, that incentive will disappear.

There is an effort underway to promote legislation to make charitable giving a "universal deduction", so it could be added on top of the standard deduction. Rep. Mark Walker has introduced the bill, and United Way has reached out to its members asking them to support it.

It would likely cost the federal government billions of dollars in lost tax revenue if the bill were to pass, but it would also likely increase charitable giving.

What do you think?

Do you donate to charity on a regular basis? Do you itemize those donations on your taxes? If GOP tax reform passes and the standard deduction increases, will that impact your charitable giving? If not, why not?

Tell us in the comments what you think, then use the Take Action button to tell your reps!

— Asha Sanaker

(Photo Credit: Philip Taylor via Flickr / Creative Commons)

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