Big time correction in order from my previous post – the same day I posted last week on a mysterious Yahoo story citing that deductions were getting capped at 28%, the Chronicle of Philanthropy posted a more positive story about the Obama administration’s approach to this topic – click here to see it. In short, it may be that the administration is backing off reducing the cap on charitable deductions to 28% – saving that one for other deductions – but capping charitable deductions at 35% (so it only effects those in higher than 35% brackets). Thank you to Russell Willis from CharitablePlanning.com for bringing that story out on one of my Linkedin posts.
The Philanthropic world should not be so happy though – this could still be a $4,600 tax hit per $100,000 of giving for your best donors – but it should at least do away with some of the doom that many were expecting (especially me). Capping deductions is still a bad idea and hopefully will not go anywhere. In the meantime, at least we know that the President sees a little more value in the charitable sector and hopefully won’t be pursuing this insanity of taxing charitable donors.