Tax Cuts and Jobs Act of 2017: Charitable Giving Implications for Nonprofits

Johanna J. Allex, Esq.
Stafford Rosenbaum LLP
608-259-2664
jallex@staffordlaw.com
www.staffordlaw/attorneys/johanna-j.-
allex/
Tax Cuts and Jobs Act of 2017:
Charitable Giving Implications
for Nonprofits
© 2018 Stafford Rosenbaum LLP

Tax Cuts and Jobs Act of 2017
• Public Law 115-409, December 22, 2017
• Effective January 1, 2018
• Includes both temporary and permanent provisions

For Today…
• Provisions that Impact Charitable Giving
• Making Lemonade – Some Suggestions

Temporary Provisions
12/31/2025
• Increase in standard deduction from $6,350 to $12,000 for a single
filer and from $12,000 to $24,000 for joint, married filers
• combined with elimination of personal exemption
• 10,000 cap on itemized deduction for state and local taxes
• Elimination of itemized deductions subject to 2% of AGI floor

12/31/2025
• Reduction of tax rates at most levels
• Increase in exemption amount to $11,200,000 per person for
estate, gift and generation skipping transfer taxes

12/31/2025
“Let’s do the numbers”
Kai Ryssdal, Marketplace

12/31/2025
“Let’s do the numbers”
• Married couple filing jointly
• AGI = $80,000
• State and Local Taxes (SALT) = $15,000
• Mortgage Interest = $8,000
• Charitable Contributions = $1,500
• Unreimbursed employee business expenses = $2,000
• Two personal exemptions = $8,100

12/31/2025
SD 2017
Itemizer
2017
SD 2018
Itemizer
2018
AGI $80,000 $80,000 $80,000 $80,000
Personal
Exemptions
$8,100 $8,100 __ __
Standard
Deduction
$12,700 __ $24,000 __
Schedule A __ $26,500* __ $19,500**
Taxable
Income
$59,200 $45,400 $56,000 $60,500
* SALT = $15,000, Mortgage Interest = $8,000, Charitable Contrib. =
$1,500, Unreimbursed employee business expense = $2,000
** SALT = $10,000, Mortgage Interest = $8,000, Charitable Contrib. =
$1,500

12/31/2025
SD 2017
Itemizer
2017
SD 2018
Itemizer
2018
AGI $80,000 $80,000 $80,000 $80,000
Personal
Exemptions
$8,100 $8,100 __ __
Standard
Deduction
$12,700 __ $24,000 __
Schedule A __ $26,500* __ $19,500**
Taxable
Income
$59,200 $45,400 $56,000 $60,500
Tax Due $13,089* $7,909* $6,339** $6,879**
* 25% tax bracket
** 22% tax bracket

12/31/2025
Implications:
• Reduction in the % of itemizers
• Reduction in financial giving incentives – lifetime and estates
• Significant reduction in overall charitable giving
• Loss of jobs in the charitable sector

12/31/2025
• Charitable contribution deduction limits increased
• 50% AGI increased to 60% AGI
• Overall limitation on itemized deductions suspended (“Pease”
Limitation)

Permanent Provisions
• Denial of deduction for amounts paid in exchange for college
athletic event seating rights
• Private colleges and universities will at least 500 students and
endowments worth at least $500,000 per full-time student must
pay a 1.4% excise tax on net investment income

Possible Legislative Correction:
Universal Charitable Giving Act of 2017
H.R. 3988; S.2123
• Deduction with a cap of up to 1/3 of the standard deduction ($4,000/$8,000)
for taxpayers who do not itemize
• Introduced by Rep. Mark Walker R-NC, 10/5/17
• Introduced by Senator James Lankford R-OK, 11/14/17
• Referred to the Senate Finance Committee
• 2% Chance of Enactment (Skopos Lab)

Lemonade:
Where to See It/How to Make It
• Embrace the 365-day giving cycle
• Strengthen your membership database
• Plan your communication strategy
• Know your target audience
• Refine your message
• Update your website and be present on social media

Lemonade:
• Include middle income donors in your legacy planning strategies
• Network within and outside of your community
• Build partnerships rather than close transactions

Lemonade:
• Be willing and able to contact your legislator – S.2123, H.R. 3988
• www.gov.track.us
• https://www.finance.senate.gov/about/membership
• Senator Tammy Baldwin: 202-224-5653; www.Baldwin.senate.gov/feedback
• Senator Ron Johnson: 202-224-5323; www.ronjohnson.senate.gov/public
• Representative Mark Pocan: 202-225-2906; pocan.house.gov
• © 2018 Stafford Rosenbaum LLP

Lemonade:
• Change + Creativity = Opportunity
• “Barn’s burnt down
Now I can see the moon.”
~ Mizuta Masahide,
17th c. Japanese
poet and samurai

Questions?
Johanna J. Allex, Esq.
Stafford Rosenbaum LLP
(608) 259- 2664
jallex@staffordlaw.com
www.staffordlaw/attorneys/johanna-j.-allex/

Tax Cuts and Jobs Act of 2017: Charitable Giving Implications for Nonprofits

Recommandé

Recommandé

Contenu connexe

Dernier

Dernier (20)

En vedette

En vedette (20)

Tax Cuts and Jobs Act of 2017: Charitable Giving Implications for Nonprofits