If you’re someone who gives generously to causes you care about, there’s a new tax law on the horizon that could affect your giving strategy. Thanks to the recently passed One Big Beautiful Bill Act (OBBBA), charitable contributions will be treated differently starting in 2026—and some of the changes could impact how much you can deduct on your tax return.
The good news? There’s still time to plan ahead and lock in bigger deductions under the current rules.
A Win for Standard Deduction Filers
Until now, if you didn’t itemize your deductions, you generally couldn’t deduct charitable contributions at all.
That changes in 2026.
Starting in that year, non-itemizers will be able to deduct modest cash donations to qualified charities—up to:
- $1,000 per year if you file single, or
- $2,000 per year if you’re married filing jointly
Note: Contributions to donor-advised funds are not eligible for this deduction.
Tighter Rules for Itemizers and High-Income Donors
If you itemize and tend to give larger amounts, the rules are becoming more restrictive.
Beginning in 2026, you’ll only be able to deduct charitable donations that exceed 0.5% of your adjusted gross income (AGI).
Let’s break that down:
Example:
If your AGI is $200,000 and you give $10,000 to charity, the first $1,000 (0.5% of AGI) isn’t deductible. You can deduct the remaining $9,000.
And if your total giving is under the limit? Unfortunately, you won’t be able to carry forward the disallowed portion unless your total donations exceed one of the standard AGI limits (such as 60% of AGI for cash contributions).
New Limits for C Corporations Too
If you operate as a C Corporation, take note:
- Starting in 2026, charitable contributions will only be deductible to the extent they exceed 1% of taxable income
- If your total giving exceeds 10% of taxable income, the extra amount can be carried forward for up to five years
What You Can Do Right Now: 2025 Planning Opportunities
Since the new rules don’t kick in until January 1, 2026, 2025 is your last chance to take full advantage of the current, more generous deduction rules.
Here’s how to get the most out of your giving:
- If you usually itemize, consider accelerating your charitable donations before year-end.
- Some taxpayers are choosing to “double up” their giving in 2025, then scale back in 2026.
By acting now, you may be able to deduct your full contributions without hitting the new AGI floor next year.
Going Forward: Consider a Bunching Strategy
Once the new rules are in place, both individuals and corporations may benefit from “bunching” their charitable giving into specific years.
This means:
- Combine multiple years of donations into one year, aiming to exceed the new thresholds
- Then, in off-years, take the standard deduction and scale back giving temporarily
Example: Give two years’ worth in 2026, then take the standard deduction in 2027.
Let’s Talk Strategy
Charitable giving is about more than just taxes—it’s about impact. But when you can give generously and strategically, everyone wins.
If you’d like to walk through your numbers or create a giving plan that makes the most of these changes, give us a call. We’re here to help you support the causes you care about—while keeping more in your pocket.