Tax Reform and Giving to Pitt



photo of tax form, a calculator, and a pen

Now that the calendar has turned to 2018, it’s time to start thinking about how the new federal income tax law passed in December will impact your charitable giving plan for the new year and how the new rules could impact the University of Pittsburgh.

What should be noted first is what has NOT changed:

-          Gifts to charitable organizations such as Pitt are still tax deductible.

-          The gift tax, estate tax, and generation skipping tax will continue, and estates will still be entitled to an unlimited estate tax deduction for charitable gifts.

However, there are many more items in the new tax law that have changed or at least have been substantially modified. Perhaps chief among them is the near doubling of the “standard deduction” from $6,350 for an individual and $12,700 for a married couple filing jointly, to $12,000 and $24,000, respectively. That change alone is expected to reduce the percentage of individuals itemizing their deductions from 30% to as low as 10%.

We are fortunate that so many members of the Pitt community choose each year to make charitable contributions because they know the impact of their support goes far beyond tax benefits. Gifts to Pitt help to attract the best and brightest students and faculty, strengthen research and scholarship initiatives, and support key campus improvements. Each year alumni, parents, and friends support scholarships, fellowships, endowed faculty chairs, groundbreaking research, and myriad co-curricular programs both on and off campus. We are grateful for your continued support, which is more critical to Pitt’s continued progress than ever before.

There are also provisions in the new tax law that work in favor of charities, including an increase in the adjusted gross income (AGI) limitation on charitable gifts of cash to charities from 50% of AGI to 60% of AGI, according to the National Council of Nonprofits.

There are many other ways to make sure you take full advantage of the donations that are encouraged by the new tax law, even if you don’t itemize. Donors may:

-          Make gifts of appreciated property including real estate and securities.

-          Transfer all or a portion of the required IRA disbursement to the University.

-          Include Pitt in their estate planning.

Another substantial change in the new tax law is the elimination of the tax deduction for priority athletic seating. As of January 1, 2018, payments tied to the purchase of premium seats are no longer deductible; however, your gifts to student-athlete scholarships are critical. Those payments assist the program in providing scholarships for 475 Pitt student-athletes who compete in 19 NCAA Division I sports. The Athletic Department also provides educational and tuition support for members of the band and cheer and dance teams who faithfully participate in home and road contests. The impact of your philanthropy on Pitt’s ability to provide scholarships, as well as the importance of your fan support, grows every year.

We value your continued support and are happy to address any questions you may have about making a gift to Pitt in 2018. Please contact the Office of Institutional Advancement by phone at 1-800-817-8943 or via e-mail at giveto@ia.pitt.edu.

This is not intended to be legal or tax advice. We encourage you to consult with a professional advisor.