Tax Tidbits for Animal-Advocacy Supporters
There's been a lot of talk about President Obama's budget proposal scaling back charitable deductions and the anticipated effect on charitable giving. Should it really affect your contributions? Tax lawyer Leila Fusfeld spots the issues.
A U.S. taxpayer who itemizes deductions rather than taking the so-called “standard deduction” can deduct money or property donated to a charitable organization during the tax year if the individual has a receipt or record of the donation. The deduction for charitable giving is generally limited to 50 percent of adjusted gross income. Contributions that exceed this limit can be carried forward for up to five years.
President Obama’s 2010 federal budget proposal threatens to limit the value of charitable deductions for high-earning taxpayers beginning in 2011. In an effort to raise tax revenue for healthcare reform, Obama’s proposal would limit the value of deductions to 28 percent.
Under the current system, a taxpayer in the 35 percent tax bracket who makes a $100 donation to a charitable organization reduces tax liability by $35. If Obama’s proposal is adopted, this same deduction would be worth only $28.
So what does all this mean? First, most taxpayers are in brackets that will not be affected by the limitation. For 2009, a married couple filing jointly needs $372,950 of taxable income to reach the 35% bracket.
Second, the proposal will not affect this year's or next year's charitable deductions for any taxpayers.
And third, taxpayers affected by the limitation will still receive substantial value for their charitable donations, because organizations like Friends of Animals, Primarily Primates, and Marine Animal Rescue have never needed your support more.
Leila Fusfeld is a vegan attorney at Drinker Biddle and Reath LLP ( www.drinkerbiddle.com) specializing in business and individual taxes and tax-exempt organizations. This article does not constitute legal advice. You should contact a lawyer with respect to your own circumstances.
*Leila Fusfeld is a vegan attorney at Drinker Biddle & Reath, LLP specializing in business and individual taxes and tax-exempt organizations. www.drinkerbiddle.com
This article does not constitute legal advice. You should contact a lawyer with respect to your own circumstances.