American Taxpayer Relief Act of 2012

2013-TaxThe bill passed by Congress to address the “Fiscal Cliff” has some provisions that will be of interest to nonprofit organizations.

While the bill did not include a limitation on charitable deductions, it does include a limitation on itemized deductions for individuals with income in excess of $250,000 and married couples filing joint returns with income in excess of $300,000.

The bill did not extend the temporary 2% employee payroll tax holiday, resulting in a reinstatement of the 6.2% tax on the first $113,700 of wages. The rate had been reduced to 4.2% in 2009.

Some other items set to expire have been extended. These include IRA distributions by those age 70 ½ and older to charitable organizations, which can be made without including the withdrawal in the taxpayer’s gross income. The special rule for contributions of capital gain real property for conservation is extended and the charitable deduction by businesses for donations of food inventory has been enhanced.

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