07/29/2026
If you plan to itemize your deductions in 2026, the way you give to charity is about to change. Under the One Big Beautiful Bill Act (OBBBA), a new 0.5% "floor" has been introduced for charitable gifts.
Think of it like an insurance deductible: you have to clear this hurdle before your donations provide any federal tax benefit.
The Math: If your household income is $200,000, your first $1,000 in giving provides $0 in tax savings. If you earn $500,000, that "deductible" jumps to $2,500.
Here is how we are helping our clients navigate this:
• The "Bunching" Strategy: Instead of giving smaller amounts every year, use a Donor-Advised Fund (DAF) to consolidate multiple years of giving into one. You clear that floor once, take the deduction up front, and grant out the money to your favorite charities over time.
• The QCD Pivot: For clients over age 70½, giving directly from an IRA bypasses this floor entirely. It is a highly tax-efficient way to give because the distribution goes straight to the charity and isn't counted as taxable income to you.
You don't have to change how much you support your favorite causes—just how you structure the gift.
Let’s look at a strategy that addresses your specific financial goals.
Sources: IRS Notice 2025-67 (QCD Limits), Journal of Financial Planning: Charitable Giving in the OBBBA Era
Investment advice offered through Stratos Wealth Advisors, LLC, a registered investment advisor. Stratos Wealth Advisors, LLC and Kowal Financial Advisors, LLC are separate entities. The information in this material is not intended as tax or legal advice. Please consult a legal or tax professional for information regarding your individual situation.
