TaxWatch: ‘Only the wealthy get any kind of benefit from giving financially to nonprofits’: Bipartisan bill aims to help more Americans write off charitable donations

by | Mar 3, 2023 | Stock Market

Most people lost the ability to deduct charitable contributions on their taxes this filing season, but a new bipartisan bill — called the Charitable Act — introduced this week wants to change that in a big way. The bill would let people who take the standard deduction on their taxes — the wide majority of households — also deduct their donations to charities, religious groups and other nonprofit organizations.

During the 2020 tax year, pandemic-related laws let non-itemizers deduct $300 in cash donations. In tax year 2021, married couples could deduct up to $600. The “above the line” charitable contribution deduction expired in 2022, but the Charitable Act’s proposed write-off amounts are far more generous for donors. If the bill became law this year, the deduction could be worth more than $4,500 for an individual and over $9,000 for a married couple filing jointly, according to the bill’s sponsors. They include Sen. James Lankford, a Republican from Oklahoma, and Sen. Chris Coons, a Democrat from Delaware. The deduction amount would be one-third of the standard deduction. That means the size of the proposed write-off would increase over time because it’s tied to the standard deduction. The standard deduction and income tax brackets are indexed for inflation and adjusted annually. This year, individual taxpayers have a $13,850 standard deduction. One-third of the sum is $4 …

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