Drilling Down, More Questions Than Answers: Pending Tax Legislation
By Julie Dais, Director of Gift Planning
There’s little doubt that you’ve seen extensive news coverage of the “Big Beautiful Bill” (H.R. 1) that passed the House of Representatives by a 215-214 vote on May 22, 2025. The Senate Finance Committee released its modifications to the bill June 16, and the bill could see further changes during a floor vote. The only thing certain right now is uncertainty, making it hard to predict how your clients might be affected by tax law changes. Still,
it’s important to be aware of key components of this bill and other bills that could impact estate, financial and charitable planning.
Key Charitable Changes Pending in H.R. 1
At OCCF, we take our responsibility as your charitable experts seriously, so while the waters may still be a bit murky as to what change is coming, we want to be prepared when it does come so we can advise you in the best way possible. Megan Davis and I take the time to study and understand these potential changes and their implications, and we will continue to do so because you, your clients and your partnership are important to us.
- No Sunset of Estate Tax Exemption
The bill makes permanent the expiring 2017 tax cuts under the Tax Cuts and Jobs Act (TCJA). This means that the much-anticipated sunset of the increased estate tax exemption might not happen at the end of this year after all. If the estate tax exemption remains high, a smaller segment of your clients will be motivated to use charitable giving as a way to avoid estate tax. However, since people rarely give to charity solely for tax avoidance purposes, your clients remain very interested in discussing charitable giving and incorporating philanthropy into their estate and financial plans.
- Standard Deduction Stays High
Proposals in the bill would make permanent the higher standard deduction levels from the TCJA, and even add an additional temporary increase through 2028. The upshot here is that few taxpayers itemize their deductions, reducing the number of people eligible to claim a charitable deduction. The still-high standard deduction likely could signal a continuation of the decline in charitable giving following the 2017 tax cuts. On the flip side, the bill introduces a modest “above-the-line” charitable deduction for nonitemizers. The Senate Finance Committee increased this proposed sum to $1,000 for individual filers and $2,000 for married filers. Those numbers are up from the House of Representatives’ draft for $150 for individuals and $300 for joint filers. The bill maintains the 60% increased charitable deduction for itemizers but includes a 0.5% floor.
- Increased Taxes on Private Foundations
Private foundations can breathe a sigh of relief for now as the Senate’s version of the bill excludes an increase in excise taxes on private foundations. The House bill sharply increased excise taxes on the investment income of large private foundations, raising rates from the current 1.39% to as much as 10% for the largest entities, although private foundations with less than $50 million in assets would not have been impacted by a change. Uncertainty around tax treatment could mean private foundations may become less attractive for your charitable clients.Many nonprofit leaders are concerned that this could impact charitable giving and make donor-advised funds even more attractive. Certainly, the Oklahoma City Community Foundation remains committed to helping your clients establish donor-advised funds and other vehicles to actively support their favorite charities and ensure that critical local needs are addressed.
The IRA Charitable Rollover Facilitation and Enhancement Act
The “Big Beautiful Bill” specifically excludes any motivations making donor-advised funds eligible to receive qualified charitable distributions from IRAs, but this issue is far from settled. The IRA Charitable Rollover Facilitation and Enhancement Act of 2025 (H.R. 2891) aims to allow qualified charitable distributions from IRAs to be made to donor-advised funds. This bill seeks to remove the restriction that prevents IRA charitable rollovers from being made to donor-advised funds. The bill is currently introduced in the House of Representatives and has bipartisan support, with representatives from both Republican and Democratic parties involved in its introduction.
Whether the bill passes or not, the team at OCCF has various strategies to increase charitable flexibility for your older clients.
Our current strategies allow your clients to use their RMDs to create scholarships, provide sustainability to nonprofit endowments and create focused giving through our Donor-Designated Fund options.
IRA Charitable Rollovers
- Who is Eligible? Individuals ages 70 1/2 and older with a qualified IRA.
- How Much Can They Give? In 2025, individuals can gift up to $108,000 from a traditional IRA to a qualified charity.
- Why an IRA Charitable Rollover? A rollover gift can reduce your client’s taxable income and, beginning at age 73, meet their required minimum distribution from their IRA.
So, what’s next? H.R. 1 is currently in the hands of the Senate, with the markup and reconciliation process likely extending into July or August before sending the bill to President Trump for signature. Meanwhile, the IRA Charitable Rollover Facilitation and Enhancement Act is still in the very early stages of the legislative process, pending committee review and does not have a hard deadline for passage. Our Gift Planning Team will continue to monitor this closely and let you know as we know more about the status of these, or any other applicable bills.
OCCF’s Gift Planning Team is here for you. Please reach out anytime. We are happy to discuss options and work with you to customize a giving strategy that meets your clients’ charitable goals in the most effective ways possible under any set of tax laws.
The expert team at the Oklahoma City Community Foundation serves as a charitable giving resource to enhance the knowledgeable service you give your clients. We’ll help you structure a giving plan that maximizes tax advantages while achieving your clients’ charitable and financial goals. This newsletter is provided for informational purposes only. It is not intended as legal, accounting or financial planning advice.