Local nonprofits adjust to tax code changes

Local nonprofits adjust to tax code changes

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Among the law’s biggest changes, explains David Heinen of the North Carolina Center for Nonprofits, was almost doubling the standard income tax deduction. Individuals can now deduct $12,200 from their taxable income without itemizing, rather than $6,350; married couples filing jointly can deduct $24,400, up from $12,700. The law also eliminated the personal exemption, however, which for many taxpayers sheltered an additional $4,050 or more, depending on their income level and number of dependents.

This higher itemization threshold, says Heinen, meant roughly 22 million fewer people claimed a tax benefit from their charitable giving in 2018 than in 2017.

Many donors, he continues, thus had less of an incentive to open their wallets. According to a study by Giving USA, a Chicago-based foundation, individual charitable contributions nationwide decreased by 3.4% in 2018 from 2017 levels, adjusted for inflation. And across North Carolina, he says, nearly a third of nonprofits — including those in Asheville — worry that the worst may be yet to come.

“A lot of donors just didn’t realize, even though it was pretty well publicized, that there were big tax law changes and the standard deduction went up,” Heinen explains. “They didn’t realize that they were no longer going to be getting anything back on their taxes for their charitable contribution. So the expectation is that this year, there’ll probably be a bigger drop in giving.”

Source Name: 
Mountain Xpress

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