To earn some extra money I started working at a religious school on the weekends. Not only do I get to spend time with some incredibly bright and adorable third graders, but I get a nice paycheck to follow. Yesterday I was disappointed to find an e-mail from the religious school director telling me that we may find less money in our paychecks starting this month, due to the new tax laws going into effect. Such is the life of being an American citizen, though. There’s always a cost to being a member of society.
On the flip side, I am excited to learn that the same set of tax laws that are taking away a small portion of my paycheck are going to work to increase charitable giving in 2013. The Chronicle of Philanthropy wrote today that the new tax provisions passed by Congress “will increase charitable giving by an estimated 1.3 percent, or $3.3-billion, in 2013.”
The boost will come mainly from the decision to increase the top tax bracket from 35 percent to 39.6 percent on income above $400,000 for individuals ($450,000 for married couples), the institute said.
Because the charitable deduction is tied to a person’s tax bracket, those donors will now save $39.60 in taxes for every $100 they give to charity. In other words, their gift will cost them only $60.40, down from $65 under the 35-percent rate.
People in the top 1 percent of income distribution will provide almost all of the higher giving, increasing their donations by an estimated 6.2 percent…
So I suppose this new year in taxes isn’t all that bad in the end!