A proposed bill has the potential to put taxpayers in a charitable mode.
U.S. Rep. Chris Smith (R-NJ) and U.S. Rep. Henry Cuellar (D-TX) recently introduced the “Charitable Giving Tax Deduction Act,’ a bipartisan bill that would make charitable tax deductions “above-the-line,” allowing taxpayers to write off charitable donations without limitation, whether or not they choose to itemize.
The proposed bill would address concerns that changes made by the Tax Cuts and Jobs Act will result in fewer taxpayers itemizing their deductions, reducing the tax incentive to make charitable contributions.
These changes include, for tax years beginning after 2017 and before 2026, significantly increased standard deductions and new limitations on deductions for state and local taxes and for mortgage interest.
Brian Gallagher, President and CEO of the nonprofit United Way Worldwide, told National Public Radio that they estimate charitable giving will go down $13 billion with the implementation of Tax Cuts and Jobs Act.
The “Charitable Giving Tax Deduction Act” can potentially help restore the charitable giving and services donated. In short, it has the potential to restore the extra monetary incentive for taxpayers to make a donation to charity.
While this is a bipartisan bill, any optimism over its eventual enactment should probably be held in check. Only time will tell if this bill musters enough support in congress to ever become law.
