What if there is agreement?
If there is an agreement in Washington is it anticipated that tax rates will still rise on the wealthiest Americans. As the specifics of any plan are unknown, one can only speculate on scenarios.
If the agreement includes the capping of deductions and/or the elimination of the mortgage interest deduction, the impact for the average Presbyterian's tax situation could be significant. Presbyterians tend to be home owners with mortgages and traditionally itemize their deductions because their charitable giving exceeds the standard.
If the agreement does not include lower rates of taxation on investment income (capital gains and dividends specifically) many older Presbyterians who rely on investment income will be significantly impacted. People will have a diminished sense of their own "wealth" and their confidence in giving to the church and other non-profit organizations will likely decline.
If the estate tax threshold is lowered to $1 million as scheduled, the ability of Presbyterians to make generational transfers of their wealth will dramatically impact the long-term giving ability of the next generation. In the short term, this could have a positive effect on older Presbyterians giving from their accumulated wealth to trusted non-profits to escape the 55% death tax.
If the IRA charitable donation for taxpayers over 70 1/2 is not extended, churches and non-profits will feel the effect as one tax-deferred means for older Americans to make charitable contributions out of their accumulated assets is eliminated. Who is doing what to help?
We appreciate and support the work of our ministry partners at the Evangelical Council for Financial Accountability as they work to insure that federal tax reform does not unduly disrupt the ability of Christian non-profit organizations to thrive in America.
What Congress may or may not do is uncertain. You are encouraged to give generously before year's end to those Christian churches and charities that are advancing the Kingdom purposes of God in the world today. There is currently no cap on the deductions you can take for charitable giving and the opportunity to give directly from your IRA exists for those over 70 1/2 until year's end.