With a new administration and Congress in place, we begin to anticipate changes in the tax structure that may affect charitable giving.

How do changes in the presidency and Congress affect charitable giving? Although history shows that these transitions have little immediate impact on charitable giving, you may be wondering how potential changes might affect your charitable gift plans. The federal tax system is a perpetual work in progress, and more changes seem inevitable in the coming years. Bearing that in mind, here are some predictions about how these potential changes might affect your charitable planning.

Income Tax Brackets

Beginning in 2018, most federal income tax rates were reduced, and the top 39.6% bracket was eliminated. Returning to the previous rates may increase the value of your charitable deduction and, therefore, reduce your after-tax cost of giving.

Capital Gains Tax

Many proposals could change how investment appreciation is taxed. As it stands, if you contribute appreciated property (like stock), you completely avoid the capital gains tax you would have paid if you sold.

Universal Charitable Deduction

For the past few years, policymakers have debated whether all donors, not only those who itemize their income tax deductions, should receive a charitable deduction. A universal charitable deduction would provide a tax incentive for everyone, although the amount of the deduction might be limited for some.

Whatever the future holds, your support is key to ensuring the advancement of health care. We will alert you about tax changes that could affect your gift plans and help you make the very best charitable gift possible. To learn about changes that have already taken place in response to recent stimulus legislation, you can read more here.

For more information or to discuss your charitable giving, contact the Office of Planned Giving at 617-643-2220 or mghdevpg@partners.org.