Delaying big charitable donations until next year could mean tax savings for some people who don’t itemize their deductions, the Wall Street Journal reports.
Federal law doesn’t let donors deduct gifts on their tax returns unless they itemize deductions – and about 70 percent of all returns take the standard deduction instead of itemizing.
That may change, though, the Journal says.
President Clinton, Texas Gov. George W. Bush, U.S. Rep. Phil Crane of Illinois and others support changing the law to let nonitemizers deduct at least some gifts.
Although the proposed changes have generated bipartisan support, the Journal says, tax advisers doubt that changes will be made until next year at the earliest, the Journal says.
Martin Nissenbaum of Ernst & Young told the Journal that taxpayers who don’t itemize should consider deferring this year’s gifts until 2001 and bunching two years of donations in one year.
Clinton supports letting nonitemizers deduct 50 percent of gifts of more than $1,000, or $2,000 if married and filing jointly, effective from 2001 through 2005.
After 2005, those thresholds would drop to $500 for singles and $1,000 for married couples filing jointly.