Charitable provisions in the new tax legislation (The One Big Beautiful Bill Act) will take effect on January 1, 2026. While tax savings may not be the primary reason you choose to contribute to charity, there are possible tax ramifications to be aware of when deciding the timing of your donation. Depending on your personal situation, the information below may help you determine how to maximize your tax savings and amplify your philanthropic impact.
FOR ITEMIZERS
Beginning in 2026, if you itemize your deductions on your taxes, you can only deduct charitable giving that exceeds 0.5% of your adjusted gross income (AGI). For example, a couple with a $300,000 AGI can only deduct total contributions above $1,500 — so if you donate $25,000, only $23,500 will be deductible.
High earners in the 37 percent tax bracket will not get dollar-for-dollar deducation value of their charitable gifts starting in 2026 and tax savings will be less than they would be for the same gift made in 2025.
What to Do in 2025
Consider adding to or opening a new donor advised fund to take full advantage of current deduction rules before the new floor goes into effect.
How This Could Benefit You
You can secure higher deductions while they last, use bunching to maximize your tax savings and support your favorite nonprofit organizations over time based on your schedule.
FOR NON-ITEMIZERS
Beginning in 2026, a new universal charitable deduction is available if you do not itemize your deductions on your taxes and contribute cash: up to $1,000 for individuals or $2,000 for couples. Please note, donor advised funds are excluded.
What to Do in 2025
Waiting until 2026 to contribute cash may be a more tax advantaged strategy for you.
How this Could Benefit You
You will reduce your adjusted gross income. This could reduce your overall taxes due in 2026 as this counts as an “above the line” deduction which wasn’t previously available.
Are you over 70 ½ and do not need your Required Minimum Distribution from your Individual Retirement Account (IRA)? The annual limit for Qualified Charitable Distributions (QCDs) from IRAs is $108,000 per person ($216,000 per couple) in 2025. The amount is adjusted for inflation so it will change annually every January 1. (For future planning purposes, it will be $115,000 in 2026.)
What to Do Annually
QCDs from IRAs remain one of the most tax-efficient ways to give that reduces taxable income while supporting causes you care about most. Please note that federal legislation prohibits donor advised funds from receiving QCDs.
How This Could Benefit You
You will reduce the amount of your taxable income.
Appreciated Securities
If you have appreciated assets, you are able to avoid capital gains and possibly deduct it for full market value. You can deduct up to 30% of your AGI to charities. Gifts of stock can be received in donor advised funds. your AGI to charities.
Contact our development staff Becky Davis or Laura Herndon to learn more. For end of year giving and grantmaking deadlines please click here.
*This is not legal or tax advice, please consult with your professional advisors.