The Tax Cuts and Jobs Act signed into law in late December inspired a spate of commentary, particularly concerning the doubling of the standard deduction and the expected impact of that on nonprofits.
The new tax law doubles the standard deduction to $12,000 for individuals and to $24,000 for couples filing jointly, meaning millions of middle income taxpayers will find it easier and financially beneficial to take the standard deduction when filing their taxes rather than submitting itemized deductions. (Today, roughly 30 percent of taxpayers itemize deductions for things like mortgage interest, state and local taxes, medical expenses and charitable giving.)
For this group of people, the financial incentive inherent in itemized charitable contributions goes away. For higher income individuals (those with the ability to claim more than the standard deduction of $12,000 or $24,000) the value of itemizing deductions (including those for charitable contributions) remains.
The new law gave rise to some dire predictions for nonprofits at year-end.