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Nonprofits and the New Tax Code: Planning for the Future

On January 24, Dean Jason Wingard hosted a “Dean’s Circle” in Lewisohn Hall entitled, “Nonprofits and the New Tax Code: Planning for the Future,” where students attended from both the Master in Nonprofit Management and Master of Science in Actuarial Science programs. The group discussed the impact of the recently passed Tax Cuts and Job Act on non-profit organizations.

In 1917, the U.S. government first allowed Americans to take a tax deduction for donations to charitable organizations. Since the early 1900s, the only way to receive tax deductions for donations to charitable organizations was to file itemized tax returns. Nonprofits’ fear that since the new tax code will double the standard deduction to $12,000 for individuals and $24,000 for couples, taxpayers won’t have the incentive to itemize donations to lower their tax bill. In fact, estimates reveal that as many as 30 million more Americans will choose not to itemize.

The new law also more than doubles the size of estates that will be subject to the federal estate tax to over $22 million, reducing the number of estates subject to the estate tax. The estate tax creates a strong incentive for the super wealthy to give to charity rather than pay the tax. Eliminating that incentive for many more estates will cause a substantial decline in very large gifts, the kind that can be transformational for charities, colleges, hospitals and the arts.

Students and the Dean discussed what types of nonprofits would be most impacted and how, as nonprofit financial sector leaders, they would address the changes.

Attendees in addition to Dean Wingard included students from the Master of Science in  Nonprofit Management program: Aniah Coley, Nonprofit Management Student Association President, Megan Candio, SPS Student Senate Representative, and Rakiba Kibria, as well as students from the Master of Science in Actuarial Science program: Abhishek Shrivastava, Haoting Wen, Timothy Heimers, and  Yong Li.

Sources: NPR and The Hill