February 26, 2009
Obama's Budget Proposal Could Impact Charities
President Obama's plans for a healthcare overhaul could impact those who donate to charities, according to The Los Angeles Times.
Under the president's proposal, joint filers making more than $250,000 a year would only recoup 28% of the value of qualified deductions, rather than higher percentages laid out under current law.
That could mean a couple in the 35% tax bracket who once could have recouped $3,500 of a $10,000 donation to a charity would now recoup only $2,800.
The White House estimates the change would generate about $318 billion over 10 years.
Here's more from The Wall Street Journal.
Households paying income taxes at the 33% and 35% rates can currently claim deductions at those rates. Under the Obama proposal, they could deduct only 28% of the value of those payments.
The changes would be phased in gradually over the next few years. For the 2009 tax year, the 33% tax bracket starts with couples with taxable earnings of $208,850, when adjusted for personal exemptions and various deductible expenses. A taxpayer in the top bracket paying $1,000 of mortgage interest, for example, would see a tax break worth $350 reduced to $280.