by Jody Dilday, Philanthropic Advisor
Keeping up with tax law changes is a challenge, and 2025 is shaping up to be a landmark year. Many advisors turn to the Community Foundation for insights on legislative shifts that could impact charitable giving. Here’s what you need to know:
- Tax Cuts and Jobs Act (TCJA) Sunset – When the TCJA expires at the end of 2025, key provisions will revert to pre-2017 levels. The top individual tax rate will increase from 37% to 39.6%, potentially enhancing the benefits of charitable deductions. The estate tax exemption will also drop significantly, making charitable bequests a valuable tool for reducing tax liabilities.
- Potential Expansion of Charitable Deductions – Proposed legislation, such as the Charitable Act, could introduce a universal deduction for non-itemizers, encouraging broader charitable giving. This bill continues to gain traction.
- Uncertain Impacts – The looming 2025 “cliff” may lead to a major tax code rewrite, influencing charitable giving trends. A past example: after the TCJA reduced tax incentives for donations, charitable giving declined by as much as $20 billion.
The bottom line? We’ve got you covered. The Community Foundation closely monitors tax law developments and their implications for you, your clients, and the nonprofits they support. We’re here to help you navigate the complexities and seize opportunities for strategic charitable planning.