Bush Tax Plan Promotes Charitable Giving
House Ways and Means Committee member Jennifer Dunn (R-Washington) has indicated her willingness to introduce the legislation. A similar bill introduced by Dunn in the 106th never reached fruition. The proposed legislation will enable single taxpayers to deduct up to $500 of charitable contributions without itemizing deductions; married taxpayers filing joint returns will be able to deduct up to $1,000 in donations.
The bill will give taxpayers until April 15 of the following year to make donations and claim them as a deduction on their prior year tax return. Another provision of the bill will allow older taxpayers an opportunity to rollover funds from tax-deferred retirement accounts to charitable organizations, bypassing the income tax on the donated amounts.
In addition, the proposed legislation will increase the corporate giving level from 10% of taxable income to 15%.
Finally, the legislation will encourage states to provide a credit of up to 50% of the first $500 donated (the first $1,000 for married taxpayers filing jointly), such funds to be diverted from the states' Temporary Assistance to Needy Families programs.
The proposed legislation is expected to be introduced into the House of Representatives in February.