Latest news with #charitable donations
Yahoo
2 days ago
- Business
- Yahoo
New rules for how much you can deduct in charitable contributions
If you regularly make donations to tax-exempt charities and non-profits, you should be aware of upcoming rule changes governing how much of your contributions will be deductible. Some of the changes, which are in President Donald Trump's recently enacted federal tax-and-spending cuts packag e, affect filers who take the standard deduction. Others affect filers who itemize — which you do when your individual deductions combined exceed the standard. Here's a rundown of some key changes that will take effect in 2026: Non-itemizers may deduct more in cash gifts In the first two years of the pandemic, if you took the standard deduction on your federal income tax return, you also were allowed to deduct an additional $300 ($600 for married couples filing jointly) for charitable cash gifts you made. That special provision then expired. But, starting in 2026 you will be allowed to deduct up to $1,000 in cash donations ($2,000 for joint filers). 'This applies only to direct cash gifts to qualifying 501(c)(3) charities — not donor-advised funds or private foundations,' said Tom O'Saben, director of tax content and government relations at the National Association of Tax Professionals. New limit placed on how much itemizers may deduct Starting in 2026, those who itemize their deductions will — for the first time — be allowed to deduct their cash contributions only to the extent they exceed 0.5% of their adjusted gross income. For example, say your adjusted gross income is $100,000. You will be allowed to deduct the amount of your total cash gifts minus $500 (0.5% of $100,000. So if you make $2,000 in cash contributions, you only will be allowed to deduct $1,500. An existing rule that further limits itemizers will remain in effect: It sets a ceiling for how much you may deduct of your contributions to public charities in a given year. Specifically, you can't deduct the portion of your cash donations that exceed 60% of your AGI in the year you make them, O'Saben said. (The AGI limit is typically 30% for cash gifts made to donor-advised funds and private foundations, he added.) But you may be able to deduct any cash gifts you made outside the allowable limits in the next tax year. That's thanks to another existing rule that lets itemizers carry forward their 'excess' contributions for five years and deduct them on future returns. The 'excess' is any portion of your cash donations that exceeds the AGI ceiling and, starting next year, falls below the new floor of 0.5% of AGI. Say your AGI is $100,000 next year. You will be allowed to carry forward the first $500 of your cash gifts (0.5% x $100,000) plus any remainder of your donations above $60,000 (60% of your AGI). Lastly, O'Saben noted, 'You cannot double-dip. If itemizing, you're not eligible for the $1,000/$2,000 deduction, as that's reserved for non-itemizers.' Value of high-income filers' deductions will be capped The value of one's deductions for anyone whose taxable income puts them in the top tax bracket of 37% will be treated as if they were in the 35% bracket. Here's how that will work: Say you itemize and are allowed to deduct $10,000 in cash donations after accounting for the new 0.5% of AGI rule above. Typically, the itemized charitable deductions will reduce your tax bill by an amount equal to your top tax rate multiplied by your deductible cash donations. But if you're in the 37% bracket, you won't get the full $3,700 (37% x $10,000) in tax savings. You will reduce your tax liability by only $3,500 (35% x $10,000), O'Saben explained. Tax break for non-cash gifts also limited If you itemize, any non-cash contributions you make – such as clothes, food or household goods – are also subject to the new 0.5%-of-AGI floor. If you're taking the standard deduction, you won't be able to deduct your non-cash contributions since the $1,000/$2,000 limit for non-itemizers applies only to cash gifts. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNN
3 days ago
- Business
- CNN
New rules for how much you can deduct in charitable contributions
If you regularly make donations to tax-exempt charities and non-profits, you should be aware of upcoming rule changes governing how much of your contributions will be deductible. Some of the changes, which are in President Donald Trump's recently enacted federal tax-and-spending cuts package, affect filers who take the standard deduction. Others affect filers who itemize — which you do when your individual deductions combined exceed the standard. Here's a rundown of some key changes that will take effect in 2026: In the first two years of the pandemic, if you took the standard deduction on your federal income tax return, you also were allowed to deduct an additional $300 ($600 for married couples filing jointly) for charitable cash gifts you made. That special provision then expired. But, starting in 2026 you will be allowed to deduct up to $1,000 in cash donations ($2,000 for joint filers). 'This applies only to direct cash gifts to qualifying 501(c)(3) charities — not donor-advised funds or private foundations,' said Tom O'Saben, director of tax content and government relations at the National Association of Tax Professionals. Starting in 2026, those who itemize their deductions will — for the first time — be allowed to deduct their cash contributions only to the extent they exceed 0.5% of their adjusted gross income. For example, say your adjusted gross income is $100,000. You will be allowed to deduct the amount of your total cash gifts minus $500 (0.5% of $100,000. So if you make $2,000 in cash contributions, you only will be allowed to deduct $1,500. An existing rule that further limits itemizers will remain in effect: It sets a ceiling for how much you may deduct of your contributions to public charities in a given year. Specifically, you can't deduct the portion of your cash donations that exceed 60% of your AGI in the year you make them, O'Saben said. (The AGI limit is typically 30% for cash gifts made to donor-advised funds and private foundations, he added.) But you may be able to deduct any cash gifts you made outside the allowable limits in the next tax year. That's thanks to another existing rule that lets itemizers carry forward their 'excess' contributions for five years and deduct them on future returns. The 'excess' is any portion of your cash donations that exceeds the AGI ceiling and, starting next year, falls below the new floor of 0.5% of AGI. Say your AGI is $100,000 next year. You will be allowed to carry forward the first $500 of your cash gifts (0.5% x $100,000) plus any remainder of your donations above $60,000 (60% of your AGI). Lastly, O'Saben noted, 'You cannot double-dip. If itemizing, you're not eligible for the $1,000/$2,000 deduction, as that's reserved for non-itemizers.' The value of one's deductions for anyone whose taxable income puts them in the top tax bracket of 37% will be treated as if they were in the 35% bracket. Here's how that will work: Say you itemize and are allowed to deduct $10,000 in cash donations after accounting for the new 0.5% of AGI rule above. Typically, the itemized charitable deductions will reduce your tax bill by an amount equal to your top tax rate multiplied by your deductible cash donations. But if you're in the 37% bracket, you won't get the full $3,700 (37% x $10,000) in tax savings. You will reduce your tax liability by only $3,500 (35% x $10,000), O'Saben explained. If you itemize, any non-cash contributions you make – such as clothes, food or household goods – are also subject to the new 0.5%-of-AGI floor. If you're taking the standard deduction, you won't be able to deduct your non-cash contributions since the $1,000/$2,000 limit for non-itemizers applies only to cash gifts.
Arab News
18-07-2025
- Politics
- Arab News
British charities funded illegal Israeli settlement in West Bank
LONDON: Two charities in the UK sent millions of pounds to a school in an illegal Israeli settlement in the occupied West Bank, The Guardian reported on Friday. Kasner Charitable Trust sent around £5.7 million ($7.66 million) to Bnei Akiva Yeshiva high school in Susya via another charity, UK Toremet. The Susya settlement was established around 1983 south of the city of Hebron. It was founded next to the Palestinian village of Khirbet Susiya, which was declared an archaeological site by Israel three years later and had all its residents evicted. Settlement expert Dror Etkes told The Guardian: 'The school is likely the largest single source of employment in the settlement, and constitutes one of the main elements of the entire settlement's existence.' Baroness Warsi, the former Conservative chair, told The Guardian: 'It's appalling that any British national should be engaged in funding illegal settlements on occupied land — and it's even more disturbing that this is being subsidised by all of us taxpayers.' She added: 'Serious action must be taken so that settlements which are illegal under international law, and at the heart of a regime of discrimination and displacement, cannot benefit from charitable donations.' Labour MP Andy McDonald said: 'The government must urgently take the steps necessary to ban the use of funds originating from the UK being used to support any aspect of the illegal occupation.' He added: 'Donations to illegal settlements should invalidate charitable status and result in individual prosecutions. If legislation is needed, we must do it.'
News24
16-07-2025
- Business
- News24
Master's student's digital voucher system links donors to beneficiaries in cashless society
A Stellenbosch University master's student has developed a blockchain-based voucher system that connects donors, beneficiaries, and vendors. Blockchain – an online, easily visible, transaction recording system – was prototyped to address the inequality crisis by enabling transparent charitable donations in an increasingly cashless society. The blockchain voucher concept promotes 'community philanthropy' by digitising everyday acts of giving to preserve informal charitable practices as South Africa transitions away from cash-based transactions. A Stellenbosch University master's student has built a prototype to aid South Africa's inequality crisis: A blockchain-based voucher system connecting donors, beneficiaries, and vendors. Developed as a conceptual model in 2024 and published under an article titled 'Voucher tokenisation using blockchain and smart contracts to support people in need' in the South African Journal of Science, the system addresses a critical challenge of assisting people operating in the cash-based, donation-centred informal sector. 'Building a way for people to trust one another without trusting the person, and instead, the protocol, deeply aligns with a gap [in social welfare] that we have currently. We've got huge amounts of NGOs that get huge amounts of money from donors, but you don't actually know where it ends up,' said author Tricia Harraway. READ | Seven advances in technology that we're likely to see in 2025 'The programme was developed to address challenges such as homelessness and informal work where people in need rely on cash donations, despite a shift toward cashless transactions,' she continued, explaining her motivation. Blockchain is a digital record-keeping system that stores information across many computers instead of one central database. 'If you break block and chain, it's a block of transactions linked to each other in an immutable fashion. You can't change it, so any fraudulent activities are clear,' explained Harraway. 'It's trustless. You're not trusting an intermediary like a bank or government. More importantly, it's transparent to the world. So, for somebody that wants to donate, they can see when it is donated to that person and redeemed by that person,' she said. The voucher programme is a digital system to encourage what Harraway refers to as community philanthropy. The study explained: '[It] is a digital system for charitable donations, allowing donors to purchase and distribute digital vouchers to beneficiaries, who can redeem them for essential goods and services.' These digital vouchers can be used for necessities like food, clothing, and shelter. Harraway built a prototype of the underlying system as a proof of concept, but the actual practical implementation would be up to an organisation were it to attempt to implement the system. 'To donate to me, you'd scan my QR code, like an account number. You decide to donate a tokenised blanket voucher. You transfer it with your wallet to me. I then go to Pick n Pay, and to redeem that voucher, tap my NFC card.' The system required minimal technological infrastructure for beneficiaries. 'NFC cards are very cheap, so that saves us the problem with the mobile devices. If a person loses that card, you can replace it,' added Harraway's supervisor, Professor James Bekker. Harraway believed this voucher donation system could build trust between the public and a government organisation or NGO that decided to implement it. It would bank on transparency and trust that may be lost when donating to larger, prominent organisations. However, she did acknowledge that there were practical challenges that could prevent the implementation of such a system. 'Somebody would still need to manage the layer on top,' she said, referring to the platform people would engage with. Additionally, convincing vendors to join the platform and distributing NFC cards to the beneficiaries might present challenges. 'I can poke holes in this forever because I think you should poke holes in it. You should be creating more opportunities for people to improve an idea,' Harraway said. Harraway developed this with the idea of encouraging direct giving within communities, 'I'm interested in community philanthropy because we do that way more on a day-to-day basis than formalised ways of giving. For example, donating to a parking guard or buying a Coke for someone. Those smaller acts of kindness might decrease when we stop using cash.' With South Africa's inequality crisis showing no signs of abating, blockchain-based voucher systems could offer a path to greater financial inclusion and more effective humanitarian support in an increasingly digital economy.
