New U.S Tax Law – Tax Cuts and Jobs Act- Impact

The circular is intended for those organizations which receive funds from U.S. individuals and fromorganizations U/S501(c)(4).

The tax policy centre US has given full details, and the present house bill may not be very charitable to non-profits.

            “The American economists generally agree that the tax deduction increases charitable giving, although the magnitude of the effect is subject to debate. After assuming how much givers would change their behavior in response to those higher taxes, we estimate that individual giving would decline by between $12 and $20 billion in 2018, or between 4 and 6.5 percent. Longer run effects would be similar”.

 Even though the House version of the Tax Cuts and Jobs Act (TCJA) preservers the charitable income tax deduction, other income tax provisions of the bill could reduce charitable giving by between $12 billion and $20 billion in 2018, based on new estimates (http://www.taxpolicycenter.org/model-estimates/charitable-contributions-and-tcja-nov-2017/t17-0265-effective-marginal-tax-benefit)  from the Tax Policy Centre. A second provision- repeal of the estates tax- could reduce giving by another $4 billion in the longer run.

Those who wish to have more information please refer the below link:

Tax cuts cuts AND JOBA Act

http://www.taxpolicycenter.org/taxvox?topic_filter=16

 Those who are having long term agreements with US individual donors and organizationsmay arrange to discuss with the counterparts and plan for sustainability.

Thanking You

Yours Sincerely

K.Shivakumar

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