1. Tax law Updates Every Nonprofit Needs to Know June 22, 2018

2. Tax Law Changes – What lies ahead?

3. Summary of Tax Provisions
Two types of deductions available to individuals on their individual tax returns:
Standard Deduction – a specific amount set by law
Itemized Deduction – various items can be accumulated to take as deductions against income
Increases to standard deduction
Individuals from $ 6,350 to $12,000
Married from $12,700 to $24,000
Reduced amount that can be taken for property and state taxes to $10,000
Bonds

4. Summary of Tax Provisions
Increased exemption for Estate Tax from
$11M to $22M
Charitable Contribution limit increased from 50%-60% of adjusted gross income
Change in Unrelated Business Income
Reduced corporate, certain business and individual income tax liability
The most significant tax law changes that impact contributions are temporary provisions set to expire in 2025

5. Potential Impact
Estimated that annual contributions will decrease between $13-$20 billion each year as it is anticipated that the number of individuals who itemized will decrease from about 30% in 2017 to 6% in 2018.
As a result, of charitable giving decline projected loss of about 220,000 to 264,000 nonprofit jobs.
See Tax Policy Center – The House Tax Bill Is Not Very Charitable to Nonprofits; National Council of Nonprofits – Tax Cuts and Jobs Act, H.R. 1 Nonprofit Analysis of the Final Tax Bill.

6. Potential Impact
Possible budget cuts from government and other jurisdictions
Increase in demand in services with less money and less people to serve
Increased impact on Foundations
Change in the Estate Exemptions estimated to reduce charitable giving by $4 billion a year
November 30, 2018

7. US Annual Giving
November 30, 2018

8. Charitable Giving Statistics
November 30, 2018

9. Proposed Legislation California Federal
AB 2217 would establish a procedure that would allow the taxpayer to obtain a credit against their state taxes for the amount contributed to a nonprofit charity. 
SB 227 would allow the taxpayer to obtain a credit against their state taxes for the amount contributed to a newly created State fund. 
Federal
Universal Charitable Giving Act (S November 14, 2017) This bill allow a deduction from gross income (above-the-line deduction) for charitable contributions of individuals who do not elect to itemize deductions for the taxable year. The deduction may not exceed one-third of the standard deduction of the individual.
November 30, 2018

10. Charitable Giving Strategies
Gifts of $250 or more are required to have written acknowledgement
Noncash gifts of $5000 or more (excluding publically traded securities) are required to have qualified appraisals
Bequests
Bunching of Deductions
Greater Utilization of Donor Advised Funds – National Philanthropic Trust
Continue communicating the important impact of your organization in individual lives
November 30, 2018

11. Charitable Giving Strategies
Sell Stock and Donate Cash
Donate Stock
Stock Value
200,000
Capital Gain Tax
(40,000) -
Charitable Deduction
160,000
Amount to Charity
Saves tax payer money that they would have to pay in capital gains
Provides the tax payer a higher amount of charitable deduction
Increases the amount provided to the charity
November 30, 2018

12. Thank you Autumn Rossi, CPA Partner Hayashi Wayland autumnr@hw-cpa.com 12