The Asheville Citizen-Times ran an article on December 25 regarding the recent sweeping tax reform bill that passed and its possible implications for nonprofits. Below are excerpts from the article, including portions by David Bailey, president and CEO of United Way of Asheville and Buncombe County. Read the full article here, which includes information from local tax attorneys at Dixon Hughes Goodman and analysis from David Heinen of the NC Center for Nonprofits.
The tax reform bill that passed Congress last week reduces two significant incentives for giving to nonprofit organizations, and local charities are waiting anxiously to see whether it affects donations. Millions of Americans who get a tax break in return for giving to nonprofits, churches and other religious organizations will see the value of that deduction disappear when the new law goes into effect Jan. 1. Their tax bill will be lower if they take the new, higher standard deduction on their tax return instead of itemizing deductions like charitable contributions. Another change, which will probably have less of an effect, eliminates a reason for a much, much smaller number of people to reduce the amount of estate taxes levied on their assets when they die by willing money to charity.Those moves have leaders of some nonprofits nervous, although some are more optimistic about future giving than others.David Bailey, president and CEO of United Way of Asheville and Buncombe County, said there is a lot of uncertainty about the tax law because it is new and complicated. He said that, most likely, what the United Way calls its "leadership donors" will be those most impacted by the change in tax laws. They give more than $1,000 a year. But he said he can't predict what difference the new law will make. The ability to deduct contributions on tax returns is "probably in the top five of reasons people give, but it's probably not in the top three," he said. "It's a reinforcement of good behavior."
Regardless whether you make your gift to local nonprofits for their potential tax benefit, your gifts have a powerful impact on our community.