The House and Senate tax reform conference committee voted to release its conference report on the Tax Cuts and Jobs Act, setting the stage for a final votes in both chambers this week.
As we continue to read through all of the details of the final legislation, here are a few highlighted provisions with relevance to the charitable community:
- Retains seven individual tax brackets with reduced rates, including a new top rate of 37% (sunsets in 2026)
- Doubles the standard deduction; reduces the number of taxpayers who itemize to fewer than 10% of all taxpayers (sunsets in 2026)
- Estimates suggest that charitable giving could decline between $12-$20 billion per year
- Estate tax threshold doubles and is indexed for inflation; $11 million for individuals, $22 million for couples (sunsets in 2026)
- Repeals in the individual health insurance mandate
- Excise tax on net investment income of certain colleges and private universities
- Excise tax on executive compensation on income above $1 million for any of the five most highly compensated nonprofit employees
- UBIT – must be computed separately for each line of business
In a show of collective force, the sector was successful in having a provision that would have effectively repealed the Johnson Amendment removed from consideration in the final conference report. Among the items also NOT included in the final bill: a provision that would have eliminated private activity bonds, a UBIT provision that would have changed the tax treatment of taxpayer funded research shared with the public, a provision requiring enhanced reporting for donor advised funds, a provision simplifying the excise tax on investment income of private foundations, and a provision that would have allowed the IRS to modify the volunteer mileage rate.
What Now?
While reports may suggest that final passage is likely, it is not necessarily assured, and your voice could help make the difference.
Take a few moments to contact your Members of Congress today and urge them to vote “no” on the Tax Cuts and Jobs Act Conference Report.
Whatever happens with this next vote, it is absolutely critical that the charitable community’s voice is amplified to continue the fight in 2018.
