Will Congress Revive the Charitable Deduction? Insights on New Legislation

ARTICLE | September 24, 2024

Authored by Vasquez + Company

In response to the drop in charitable donations following the Tax Cuts and Jobs Act, Congress temporarily allowed individual donors who didn’t itemize deductions to claim up to $300 in charitable contributions for 2020 and 2021. This article, “Update on a Possible Universal Charitable Deduction," examines the impact of this deduction on giving patterns and discusses current efforts by a bipartisan group of U.S. senators to reinstate and expand this tax incentive.

Key Points:

• Impact of the Standard Deduction: The doubling of the standard deduction in 2018 led to a significant drop in charitable donations, particularly affecting nonprofits.
• Temporary Relief: The universal charitable deduction during the pandemic motivated millions of donors, especially those in lower income brackets, to contribute to charities.
• Current Legislative Efforts: The proposed Charitable Act aims to extend and expand the nonitemized deduction for charitable contributions, potentially allowing significant deductions for individual taxpayers.

For more details, read the full article here.

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