Study Says Tax Rate Hike May Spike Donations to Charity

10:16 pm Estate Planning

money gift2 150x150 Study Says Tax Rate Hike May Spike Donations to CharityA study from the Tax Policy Center and the Urban Institute Center on Nonprofits and Philanthropy says the fiscal cliff tax deal that upped the top tax rate to 39.6 percent on those individuals earning more than $400,000 per year ($450,000 for married couples) is likely to increase donations to charity.

The study noted that wealthy households can now deduct charitable contributions at a higher rate, thereby reducing their tax liability by approximately seven percent more than under previous law.

The hike in capital gains taxes may also prove to be helpful to charity coffers, especially for gifts of stock, real estate or other appreciated assets.

The study noted that the limits on deductions known as the Pease limitations is not expected to hurt charitable giving because of the higher tax rates.

Gifting can be an advantageous tax strategy as part of a comprehensive estate plan.  Contact us today for individualized planning strategies to meet your unique needs.

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