Nonprofits on fence about fiscal cliff deal
January 03, 2013
It appears the looming fiscal cliff will be avoided, thanks to legislation that was recently passed by Congress and the Obama administration. It retires some of the "Bush-era tax cuts" as a way to reduce the national deficit, and all though it didn't put a direct cap on charitable deductions, the personal exemption phaseout (PEP) and Pease provision will place itemized deductions on wealthy Americans.
Starting January 2013, individuals who earn more than $200,000 and families bringing in more than $300,000 will see their deductions for charitable contributions fall 3 percent on average.
"Since it is based on income (not the amount of deductions), it essentially operates as an income tax surtax, not a cap on itemized deductions (i.e., deductions retain the full marginal tax value for most taxpayers)," said Joseph Rosenberg, a research associate at the Urban–Brookings Tax Policy Center.
However, nonprofits are concerned
by the fact that the charitable deduction could still be brought to the table in future negotiations, reports the Nonprofit Times.
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