Upcoming Changes to Charitable Deductions: What Donors Should Know Before 2026

Changes are coming for charitable deductions—and 2025 may be your last chance to capture the full tax benefits of your charitable giving before new limits take effect. The One Big Beautiful Bill Act passed this summer introduced new limitations that will reduce the tax advantages to charitable giving beginning in 2026. While these changes don’t lessen the impact of your generosity, they do make it essential to plan your gifts strategically.

Charitable giving remains one of the most meaningful ways to support the causes you care about. These new tax laws simply raise the stakes for thoughtful planning—especially when it comes to the timing and structure of your contributions.

A New “Floor” for Itemized Charitable Deductions

Beginning in 2026, taxpayers who itemize will only be able to deduct charitable contributions that exceed 0.5% of their adjusted gross income (AGI).

This creates a threshold that must be cleared before any charitable giving becomes deductible.

For example, a couple with $300,000 in AGI would only be able to deduct charitable gifts above $1,500 (0.5% of AGI). Gifts up to that amount would not be deductible.

A New Cap on Charitable Deductions for High Earners

Also beginning in 2026, taxpayers in the current 37% marginal tax bracket will see the value of their itemized charitable deductions capped at a 35% tax benefit.:

For example, consider a high-income donor with $1 million of AGI making a $100,000 charitable gift:

• The first $5,000 would not be deductible because of the new 0.5% floor
• The deductible portion would be limited to a 35% benefit, instead of 37%
• The total deduction from their charitable giving would fall to $33,250—down from $37,000 under today’s rules
  

What To Do Now

2025 is the last year to take full advantage of current rules. One strategy to help you take full advantage is to front-load several years of planned gifts of appreciated stock into a donor advised fund.

With strong market performance, moving several years of planned gifts into a donor-advised fund now can lock in today’s tax benefits while creating a pool of assets for future giving. This approach allows donors to capture the full value of their charitable deductions before the new limitations take effect, while also creating a pool of assets they can grant out to charities over many years.

If you’d like to review how these rules may affect your charitable plans or whether strategies like donor-advised funds, charitable trusts, or gift bunching make sense, our team is here to help you navigate the details.