The Placer Community Foundation is pleased to inform local donors and nonprofits about the charitable tax deductions recently preserved through the American Taxpayer Relief Act of 2012.
In the bill that ultimately passed on Jan. 1, the charitable deduction will continue to be coupled with an individual's or household's corresponding tax rate. For example, under the new tax law the highest tax bracket will be 39.6 percent. Therefore, affected earners can deduct 39.6 percent for charitable giving.
Tax-free distributions to charity from an Individual Retirement Arrangement held by someone aged 70½ or older of up to $100,000 per taxpayer will be extended until Dec. 31, 2013.
This is good news for Americans who make charitable contributions, but even better news for children and families who receive services from nonprofit organizations that rely on these donations, according to the foundation. A study conducted by United Way Worldwide in November 2012 showed 30 percent of Americans would reduce their giving levels without charitable giving tax incentives. The charitable deduction is used by people of varying income levels, not just high-income individuals.
“We, along with so many others, are relieved that Congress and the White House collaborated to pass this legislation,” stated PCF Chief Executive Officer Veronica Blake. “Many negotiations lay ahead, but meanwhile one layer of uncertainty has been removed.”
Nationally, nonprofits provide 10 percent of America’s workforce, accounting for 13.5 million jobs. Nonprofits account for 5.4 percent of the GDP and 9 percent of all wages paid. In Placer County alone, according to the National Center for Charitable Statistics, 1,300 nonprofit organizations are serving local communities.
“The preservation of the charitable deduction in the current legislation is a testament to the nonprofit community’s collective efforts over the past few months to convey the importance of the charitable sector,” Blake said. “The membership group with which PCF participates in Washington D.C. – the Council of Foundations – has been actively engaged during the entire process of addressing the fiscal cliff.”
Each year, the Placer Community Foundation distributes grants to nonprofits in the arts, community development, education, children and youth, health and human services, environmental protection and animal welfare. Placer Community Foundation is a 501(c)(3) nonprofit public charity. The foundation has granted $4.1 million and currently has assets of roughly $10 million. To learn more about PCF, visit www.placercf.org.