As the new year and a new administration unfold, potential changes in tax policy may impact your clients’ charitable planning. Here’s a quick refresher on the key issues and how they might evolve: 

Tax Cuts and Jobs Act (TCJA) of 2017: What to Know 

  • Expiration Timeline: TCJA provisions are set to expire at the end of 2025. 
  • Key Impacts:  
  • Individual Tax Rates: Lowered rates reduced tax savings for charitable donations. 
  • Standard Deduction: Nearly doubled, limiting the number of taxpayers who itemize and claim charitable deductions. In 2025, the standard deduction is $15,000 (single) and $30,000 (married filing jointly). 
  • Estate Tax Exemption: Doubled to $13.99 million (2025), reducing tax-driven incentives for charitable bequests among ultra-wealthy clients. 

Potential Outcomes in 2025 

  1. Extension of Current Provisions:  
  1. Continued higher standard deduction and estate tax exemption. 
  1. Charitable giving patterns may remain stable but slightly reduced. 
  1. Expiration Without Replacement:  
  1. Reversion to pre-TCJA rules could increase giving as more taxpayers itemize and face higher tax rates. 
  1. Lower estate tax exemption would incentivize lifetime and legacy charitable gifts. 
  1. New Legislation:  
  1. Proposals like the Charitable Act could introduce universal charitable deductions, encouraging broader giving. 

What Drives Charitable Giving? 

While tax benefits are influential, most donors prioritize: 

  • A sense of social duty. 
  • Passion for specific causes. 
  • Religious or ethical motivations. 

Many of your clients want to give back regardless of tax advantages. Remember the benefits to families and the community when discussing giving back. There are also health and emotional benefits. And, of course, there are benefits to you as their advisor when working with clients who think through giving, generational impact, and their community. 

How We Can Help 

The Omaha Community Foundation team is here to support you and your clients through these legislative changes. Whether structuring lifetime gifts, planning legacy strategies, or navigating evolving tax incentives, we’ll help ensure your clients achieve their philanthropic goals. Contact us anytime to strategize and stay ahead of the changes!