Charitable Contribution Deduction: Internal Revenue Code

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The charitable contribution deduction was added to the Internal Revenue Code in 1917, however it has undergone substantial revision in the time proceeding. The purpose of this deduction is to encourage giving to nonprofits by providing a tax incentive to individuals who donate. The deductible amount depends on the taxpayer’s marginal tax rate, giving those in a higher tax bracket a higher deduction for their contribution. It is important to note that this deduction applies only to individuals who choose to itemize on their tax returns, instead of taking the standard deduction. Therefore, wealthy households benefit most from the charitable contribution deduction tax incentive. Over the past decade, there has been discussion and several proposals

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