July 17 (Bloomberg) -- Taxpayers would receive more time to make deductible charitable contributions in a bill passed today by the U.S. House of Representatives.
The measure would allow taxpayers to take deductions starting with their 2014 tax returns for contributions they make through the following April 15, the date taxes are due. That change would align the deduction and the tax benefit, compared with current law that sets a Dec. 31 deadline for donations. That often comes before taxpayers know their final marginal tax rate and whether they will itemize deductions.
The measure is part of a bill that would cost the government $16.2 billion in foregone revenue over the next decade, was passed on a 277-130 vote. Also, it would revive and make permanent lapsed tax breaks for contributions of conservation easements and food inventory.
It also would make permanent an expired provision that lets people older than age 70 1/2 with individual retirement accounts to direct all or part of their distributions directly to charity. Those donations would count toward the required minimum distribution and be excluded from taxable income.
“It’s a fundamental question of fairness, and it’s a fundamental question of: Do we care about our fellow citizens in their time of need?” said Representative Tom Reed, a New York Republican.
The Obama administration opposes the bill and has threatened a presidential veto, meaning the measure is unlikely to become law.
Democrats said they supported many of the provisions in the bill. They objected to the measure in part because it adds to the projected budget deficit.
“It’s not paid for,” said Representative Mike Thompson of California, a Democrat who is a chief advocate for the conservation easement tax break. “We need to pass it. We need to do it right.”
The bill is H.R. 4719.
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