Charitable giving often reflects personal values and a desire to support meaningful causes. But with new tax rules taking effect in 2026, your approach to donations could also become a critical part of your financial strategy.
As we approach the end of 2025, understanding how these changes affect charitable deductions is key to making intentional, tax-efficient contributions.
Key Updates to Know for 2026
The One Big Beautiful Bill Act, passed in mid-2025, introduced several tax reforms, including notable adjustments to how charitable contributions are treated. Here’s what’s changing:
1. Above-the-Line Deduction for Non-Itemizers
Taxpayers who take the standard deduction will be able to deduct up to $1,000 (or $2,000 for married couples filing jointly) in cash gifts to qualified charities.
Contributions to donor-advised funds (DAFs) or private foundations do not qualify.
2. AGI Threshold for Itemized Donations
If you itemize, charitable contributions will only be deductible once they exceed 0.5% of your adjusted gross income (AGI).
For example, with an AGI of $100,000, only donations beyond $500 would be eligible for a deduction.
3. Deduction Benefit Cap for High Earners
Taxpayers in the top tax bracket (37%) will see their benefit from itemized deductions (including charitable giving) capped at 35%.
This applies to incomes above $626,350 (single) or $751,600 (married filing jointly).
Planning Opportunities: How to Adjust Your Giving Strategy
To make the most of your charitable impact—and your tax benefit—consider these forward-looking strategies.
Bunch Contributions for Better Timing
Rather than spreading donations out yearly, consider grouping multiple years' worth of giving into one. This can help push you over the itemization threshold in high-income years, especially under the new AGI floor.
If you're planning a significant gift, it may make sense to complete it before the end of 2025—before the new rules kick in.
Maximize Deductions with a Donor-Advised Fund (DAF)
DAFs allow you to:
Make a deductible contribution now
Distribute funds to nonprofits later
Maintain advisory control over distributions and investment choices
This approach can be useful if you're not yet sure where you want your donations to go but still want to lock in a current-year tax benefit.
Note: DAFs come with fees and do not qualify for the above-the-line deduction for standard filers.
Consider Qualified Charitable Distributions (QCDs) from IRAs
If you're 70½ or older, a QCD lets you give directly from your traditional IRA to a qualified charity—without increasing your taxable income.
Benefits include:
Satisfies all or part of your required minimum distribution (RMD)
Excludes the amount from taxable income
No need to itemize
Limits:
2025: Up to $108,000
2026: Up to $115,000
Up to 50% of that limit can be directed to certain trusts or annuities
Make Your Donations Count: Smart Giving Tips
Whether you're giving $100 or $100,000, these best practices can help ensure your generosity goes where it matters most.
Donate directly to organizations to avoid fundraising fees or scams
Vet nonprofits through trusted platforms like CharityNavigator, GuideStar, or CharityWatch
Watch for matching gifts, especially during campaigns with corporate partners or through your employer’s giving program
Looking Ahead
As the tax landscape evolves, so should your giving strategy. Planning ahead could help you give more effectively, reduce your tax burden, and create a lasting impact.
Ready to align your charitable goals with smart tax planning?
Contact us today to explore strategies tailored to your financial picture.
This blog is for informational purposes only and is not intended as tax, legal, or investment advice. Strategies should be customized to your personal situation. Consult a qualified tax advisor or financial professional before making decisions. All investing involves risk, including the potential loss of principal. Past performance is not a guarantee of future results.