The Republican tax reform plan moved a step closer to becoming law.
Despite unanimous opposition from Democrats, GOP senators had enough support to pass the bill and now moves to the House.
Local non-profits like Salvation Army have been worried that the bill could affect the amount of donations they receive.
Captain Andy Miller with the Salvation Army says December 31 is when the organization receives the most donations.
“Every year at the end of the year, if you look at our online donations, the last two days of the year, we receive the more donations on those days than the entire month of November,” says Miller. “So, we're concerned if this incentive, which is a great part of our society, if it's not there it could greatly impact our donations.”
Here's how the new tax code could affect charitable organizations
There's two main ways most Americans file their taxes
- Itemized bill
- Standardized bill
The standardize route is just a fixed amount of money and it's less work.
The itemized route takes more time and you have to take into account all the small deductions you want to take.
With the new tax code some of the itemized options are going to disappear and the standardized deduction would going to be doubled.
That means more people are just going to want to take the easy route and go with a standardized deduction, leaving behind any charitable contributions they could make to lessen their tax bill
Charitable contributions would still be listed as a deduction but taxpayers must itemize to take advantage of the benefit.
Captain Miller feels fewer people would donate to charity since they will already get more money filing standardized.
However, not all local non-profits are as concerned. Metropolitan Ministries said they were pretty optimistic.
They provided us this statement:
“Tampa Bay is such a great community. We feel people will continue to donate despite not getting that tax incentive."
While a tax break isn't usually the only reason people donate, it is an incentive.
In May, staff at Indiana University Lilly Family School of Philanthropy released a report hat said doubling the standard deduction and reducing the top tax rate -- something the Senate's version of the bill would do -- could decrease charitable giving by as much as $13 billion.
Oklahoma senator James Lankford, is working on another bill that would specifically help these organizations.
Under the Universal Charitable Giving Bill you could still get a tax break even if you don't go the itemized route.
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