Nonprofit leaders throughout the country are holding their collective breath waiting for the answer.
A few months ago, we told you about the charitable deduction limitation scare caused by Obama’s budget plan. The panic resided when Obama clarified that the charitable deduction was not being targeted for reduction.
But the so-called “Pease” limitation is now providing a new reason to be afraid. Barring legislative action this year, Pease is scheduled to go into full effect in 2013. Pease reduces the deduction for charitable contributions by 3% of the amount by which AGI exceeds a specified threshold.
This, in effect, acts like an income tax surcharge and hurts high income taxpayers who make substantial charitable deductions.
Keep following this blog to get updates on Pease. In the meantime, make sure your nonprofit never provides tax advice to its donors, who should always consult with their own tax professionals.