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Charities applaud potential new tax laws

On Behalf of | Dec 17, 2015 | IRS Issues

Georgia residents may be interested to learn that House Republicans recently passed legislation that would greatly benefit charitable organizations. House Republican leaders have already been told by both Senate Democrats and the White House that they will help to pass the new laws.

One of the laws involves re-implementing previous laws that had expired and making them permanent. A major portion is the IRA charitable rollover. With this, people may donate distributions they have to take from their IRAs to charity rather than taking them for themselves. This is beneficial to both, since the withdrawals would otherwise count as taxable income to the account holders. They actually spend less than if they kept the distributions and paid taxes on them.

Another change is a permanent extension of a deduction for farmers who donate healthy food to charities. This tax break also comes with an increased limit from 10 percent to 15 percent. Finally, conservation easements will also be enhanced, allowing farmers to wipe out 100 percent of their tax liability when they grant the easements to land preservation groups.

The increased tax breaks for charitable giving are good news for both the charities as well as for taxpayers. When people have high wages, having the ability to rollover their IRA required minimum distributions to charities can help to greatly reduce the tax burden they might otherwise face. Planning for future taxes is a smart thing for people to do. By doing so, they can minimize the amount they have to pay while also avoiding such things as audits, tax liens and other issues. Tax law is extremely complicated, and the Internal Revenue Code is updated and changed constantly. People may want to check with their tax attorney every year to make certain they are planning in accordance with current rules and regulations.