Ten Things You Need to Know About How the New Tax Law Affects Churches

Congress has approved a new tax plan that is impacting charitable giving. At the outset of this article, it is important to remember that Christians give, not due to taxes of man, but command of God (Mal 3:10) and a heart of cheerfulness (2 Cor 9:7).
Thankfully, the land of the free and home of the brave gives some incentives to be givers. How does the new tax plan impact giving to 501(c)3 organizations?

 

Thankfully, one of my U. S. Senators, Tim Scott, had a conference call with some pastors in my area of South Carolina, and this is what he communicated to us:

 

  1. The standard deduction amounts are doubling. The amount for singles will be $12,000 and for married couples it will be $24,000.
  2. The charitable deduction amount for those who are able to itemize will be reduced to 90% of the amount given.
  3. Approximately 70% of taxpayers are currently not able to itemize and that number is estimated to grow to 90%.
  4. The tax brackets will be lowered for everyone.
  5. The Corporate Tax bracket is being reduced from 35% to 21%.
  6. The Child tax credit will be doubled.

Key Positive Things to Keep in Mind

  1. The burden on taxpayers will be reduced and therefore there will be more discretionary income for people to spend and hopefully increase their charitable giving.
  2. Per Sen. Scott, over the next 8 years, there will be a 1.2 trillion increase in money coming into our pockets.
  3. Companies are already beginning to give bonuses to employees and some are giving pay increases.
  4. The IRS will have the employee withholding tables in effect by February 15th.

 

It was mentioned how important it will be to communicate clearly about the additional discretionary income that will be available. Also, to use as a teachable moment for our congregations about the importance of our tithes and offerings.

 

*I encourage you to go to the Lord, via prayer, plus consult with a CPA and/or attorney before you make any major financial decisions.

3 Comments on “Ten Things You Need to Know About How the New Tax Law Affects Churches”

  1. What does this mean: “The charitable deduction amount for those who are able to itemize will be reduced to 90% of the amount given”?

    I’m not seeing this in any of the literature and don’t know what the implication is.

    Pastor (and former corporate attorney) Fred Greco

  2. I don’t think number two above is correct. I haven’t read anything about the charitable contribution deduction being reduced to 90% of the amount given.

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