01/07/2026
Important 2026 Tax Changes: New Opportunities for Charitable Giving!
If you are charitably inclined, this is important information for you. The One Big Beautiful Bill Act (OBBBA), signed into law last year, brings some exciting updates to how charitable donations affect your taxes—starting with your 2026 return (the taxes you file in 2027). Here’s a few of the key changes:
1. New Deduction Even If You Don’t Itemize: For the first time in a decade, people who take the standard deduction can now deduct cash gifts to qualified public charities right off the top.
Up to $1,000 for single filers and $2,000 for married filing jointly
Great for everyday donors! (Note: Gifts to donor-advised funds or private foundations don’t qualify for this one.)
2. A Small Floor for Itemizers: If you itemize your deductions, only the portion of your charitable gifts that exceed 0.5% of your adjusted gross income (AGI) will count toward your deduction starting in 2026. This is a key change compared to previous tax policy.
3. Donor-Advised Funds Are Still a Smart Strategy: DAFs remain powerful, especially for itemizers. You can contribute a larger amount now to get a bigger upfront deduction, then recommend grants to charities over time. Perfect for “bunching” donations and maximizing benefits, especially in a high income year.
4. Qualified Charitable Distributions (QCD’s) for Those 70½ and Older: QCD’s remain unchanged under the new tax laws. If you're 70½ or older, you can transfer up to $111,000 (2026 limit, indexed for inflation) directly from your IRA to qualified charities. This counts toward your required minimum distribution (RMD), is excluded from your taxable income, and bypasses the new AGI floor—making it a highly tax-efficient way to give, especially in RMD years if you don’t need the income.
5. Cap for High-Income Taxpayers: Those in the top 37% federal bracket will see the tax benefit of itemized charitable deductions limited to a 35% rate.
These changes could make a real difference in how much of your donation goes to the causes you support versus going to taxes. If you have questions about how this might affect you, please send me a message! Consult your tax professional for specific tax advice.
