08/17/2025
New Charitable Contribution Rules Are Coming—Here’s What You Need to Know
Big changes are ahead for charitable giving, thanks to the One Big Beautiful Bill Act, signed into law on July 4, 2025. If you donate to nonprofits or advise clients who do, here are the key updates taking effect January 1, 2026:
✅ Above-the-Line Deduction for Non-Itemizers For the first time since 2021, taxpayers who don’t itemize can deduct charitable gifts—up to $1,000 for individuals or $2,000 for married couples. 🔹 Must be cash gifts to accredited charities 🔹 Donor-advised funds and private foundations are excluded2
📉 New Floor for Itemized Deductions Itemizers can only deduct charitable contributions that exceed 0.5% of their adjusted gross income (AGI). 🔹 Example: With $100,000 AGI, only donations above $500 are deductible3
📊 Cap on Deductions for High-Income Donors Even if you're in the 37% tax bracket, your charitable deduction is capped at 35% of AGI. 🔹 A $10,000 gift will yield $3,500 in tax savings—not $3,7003
💡 Planning Tip: If you're considering a large gift or want to maximize your deduction, 2025 is the year to act. 🔹 Consider “bunching” donations or using a donor-advised fund to lock in current benefits
📌 Questions? Let’s talk about how these changes might affect your giving strategy.
