🎗️ What the Big Beautiful Bill Means for Standard Deduction Charitable Giving
The bill formerly known as the “One Big Beautiful Bill Act” has passed and so has ushered in new tax implications for people who make donations to charities.
While there are particular changes to larger donors, corporate donations, scholarship grantors, and individual givers who itemize, one if the biggest changes impacts the majority of income tax filers who do not itemize deductions and utilize the standard deduction.
H.R. 1 has introduced a universal charitable deduction that provides a new income tax reduction tool to the nearly 90% of filers who utilize the standard deduction.
The new deduction is very similar to the COVID-era deduction that filers could use when filing 2020 or 2021 income taxes. The CARES Act created a temporary deduction of up to $300 for single filers and $600 for married filers even if they did not itemize, and more than 41,000,000 non-itemizing filers took the deduction in 2020. In 2021, nearly 48,000,000 non-itemizing filers used the extra charitable deduction. Almost all of the people that BetterFi assists through our Volunteer Income Tax Assistance (VITA) program utilize the standard deduction.
Starting with this tax year, single individual filers will be able to deduct up to $1,000 of their charitable contributions made to 501(c)(3) charities or, if filing married, up to $2,000. This deduction can be used in addition to the standard deduction that non-itemizers take when filing. This makes the tax benefit of charitable giving much more accessible to most Americans and individual filers.
At BetterFi we always recommend that potential donors use tools like Candid’s Guidestar, GivingMatters, or Charity Navigator to vet and understand organizations seeking contributions.
If you are interested in contributing to our project to #ENDPREDATORYLENDING while benefiting from the “OBBBA” tax deduction, please consider making a tax-deductible gift to BetterFi here. 👈
Read more about the philanthropy implications of H.R. 1
https://cof.org/page/one-big-beautiful-bill-impact-philanthropy
https://www.psh.com/tax-implications-of-the-big-beautiful-bill-on-nonprofits/
About BetterFi
BetterFi is a 501(c)3 economic justice enterprise and CDFI dedicated to transforming consumer credit in Tennessee to be more fair, more accessible, and a pathway out of predatory lending. More at www.betterfi.co.
📷 Cover Photo by Andreas Gusicov.