Keeping up with tax legislation’s ever-evolving landscape can feel like a full-time job! Many attorneys, CPAs, and financial advisors turn to the Community Foundation for a refresher on potential 2025 tax changes, especially those affecting charitable planning.

Here are three key updates:

  • Sunsetting Provisions of the Tax Cuts and Jobs Act (TCJA) of 2017. When the TCJA expires at the end of 2025, key tax policies will revert to pre-2017 levels. The top individual tax rate will rise from 37% to 39.6%, potentially increasing the value of charitable deductions for high-income clients. The limit for cash donations to public charities will drop from 60% of AGI to 50%, reducing some deductions. The estate tax exemption will shrink to around $7 million per individual, subjecting more estates to taxation and making charitable bequests a more valuable strategy. All of this assumes, of course, that intervening legislation won’t prevent the sunset. 
  • Potential Expansion of Charitable Deduction. Proposals like the Charitable Act  aim to introduce a universal deduction for non-itemizers, broadening tax incentives for your clients across income levels. The bill remains popular among industry leaders and continues to gain momentum. 
  • Uncertain Consequences. The 2025 “cliff” could lead to the most significant tax code rewrite in decades, with ripple effects on clients and the charities they support. After the the TCJA, charitable giving dropped by as much as $20 billion due to reduced tax benefits.

We’re Here to Help

The Community Foundation team closely tracks legal developments at the intersection of tax policy and charitable giving. Our team stays informed on potential impacts for you, your clients and the charities they support.

For more information, contact Marcia Shackelford, Chief Philanthropy Officer, at mshackelford@pacf.org.