Summary
The recent passage of H.R. 1, dubbed the “One Big Beautiful Bill,” by the House of Representatives indicates substantial tax law changes on the horizon for tax-exempt organisations. The proposed legislation, currently under Senate review, could especially affect colleges, universities, and private foundations by introducing increased excise taxes on their investment incomes. Some noteworthy expansions include raising tax rates for endowment investments and new tiered structures for private foundations based on their asset levels. Additionally, the bill proposes changes impacting executive compensation and charitable deductions.
Key Points
- The “One Big Beautiful Bill” aims to introduce significant tax adjustments for tax-exempt entities.
- Proposed excise tax increases for college and university endowment investments, with rates ranging from 4% to 21% based on assets per student.
- New tiered excise tax structures for private foundations based on total assets, with rates up to 10% for those above $5 billion.
- Expansion of the excise tax on executive compensation to all employees earning over $1 million.
- Charitable deductions for non-itemizers set at $150 for single filers and $300 for joint filers until 2029.
Why should I read this?
If you’re involved with tax-exempt organisations, this article is a must-read! It breaks down vital upcoming tax law changes that could significantly impact financial strategies and compliance obligations. Staying ahead of these shifts can safeguard your organisation from potential pitfalls and ensure you’re tapping into any opportunities presented.
