If the tax cuts are allowed to expire, the value of charitable deductions will decrease. This will occur due to the “Pease” provision, which limits the value of itemized deductions based upon a taxpayers AGI (adjusted gross income). This provision mostly applies to joint and single taxpayers who have an AGI of more than $175,000. Additionally, the Pease provision is not the only legislative act that could potentially harm the value of deductions. President Obama also wants to introduce legislation that would limit the value of all deduction to 28% for upper-bracket taxpayers.
See Laura Saunders, Charitable Deductions Under Fire, The Wall Street Journal, June 8, 2012.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
