Fiscal Cliff May Bruise Twin Cities Charities
Charitable donation deductions may be reduced to remedy automatic spending cuts and tax increases.
Since 1917, donors who give to charities have been able to reduce their taxable income. Deducting a portion of a gift to charity is meant to create an incentive to give. However, lawmakers are now considering eliminating or reducing a variety of tax deductions, including the charitable donation deduction.
Loyal charitable donors say while the tax deduction is nice, it's not the sole reason they give. However, charities do expect charitable giving to decrease if the deduction is limited. They say less wealthy donors will simply not have as much money in hand as they might have prior to limiting the deduction.