At present, only itemizers who file Schedule A can write off gifts they make to charity. We’ve learned members of Congress are seriously considering a change to the tax code known as universal charitable deductions. Sean Parnell, VP for Public Policy at The Philanthropy Roundtable, says the proposed change could "...provide an additional incentive for people to give a bit more. This tax break could encourage Americans, who are extremely generous already to give earlier in life and give more.”
Under present tax law, people who give to charities can deduct their donation only if they itemize their taxes. Most Americans do not itemize and instead take the applicable standard deduction depriving them of any tax break for charitable giving. Moving charitable donations out of the itemized category would allow people who take the standard deduction to also deduct their charitable donations from their taxable income.
For example, a married couple reporting income of $75,000 a year who donate $2,000 to their church or charity could, under this proposal, deduct the full $2,000 as well as claim the joint deduction. The current deduction for a married couple filing a joint tax return is $12,600. Single filers can claim a standard deduction of $6,300. Since the $12,600 joint deduction and $6,300 standard deduction in most cases are larger than the total of itemized deductions, most do not itemize their taxes. They get no tax break for donating to charities.
It simply recognizes the value all Americans give to civil society when they contribute to local charities, churches and civic societies doing good work. Donating your cash is a great way to reduce the amount of money you send off to Uncle Sam, and for a good cause, to boot.