Charitable Deductions Made Simple: What to Do Before 2026

Big tax changes are coming that will affect how we give to charity. The new law (often nicknamed “OBBBA”) brings some wins and some hurdles—for families and for nonprofits. Here’s the plain-English version of what to know and what to do.

What gets better

• A new write-off even if you don’t itemize (starts 2026).

  If you take the standard deduction, you’ll still be able to deduct up to $1,000 in cash gifts each year if you’re single, or $2,000 if you’re married filing jointly. (Gifts to donor-advised funds and private foundations don’t count for this new break.)

  
  

• A bigger SALT deduction for a while (starts 2025).

  The cap on state and local taxes jumps from $10,000 to $40,000 (with small yearly bumps) through 2029, though it phases down for very high incomes. This means more people will itemize again, which can make charitable deductions more useful.

What gets harder

• A small “floor” before donations count (starts 2026).

  If you itemize, you can only deduct the part of your donations that is above 0.5% of your AGI.Quick example: AGI $200,000, you give $10,000 → the first $1,000 doesn’t count; you can deduct $9,000.

  
  

• Top-bracket limit (starts 2026).

  If you’re in the 37% tax bracket, the value of each dollar of itemized deductions (including charity) is capped at 35 cents. So a $100,000 gift saves about $35,000 in tax, not $37,000.

  
  

• C-corporations get a new floor too (starts 2026).

  C-corps may deduct gifts only above 1% of taxable income (and still can’t deduct more than 10% in total per year). Many companies may bunch gifts into some years to clear the floor.

Helpful reminders and special rules

• Annual “ceiling” rules stay in play.

  For most public charities (think schools, churches, hospitals, and broadly supported nonprofits):

  • Cash gifts: up to 60% of AGI

  • Appreciated stock held >1 year: up to 30% of AGI

  • Other non-cash gifts: up to 50% of AGIAmounts over these ceilings can usually carry forward 5 years.

  
  

• Over age 70½? QCDs might be a good option

  Giving directly from a traditional IRA as a Qualified Charitable Distribution (QCD) doesn’t use the itemized-deduction rules, so the new 0.5% floor doesn’t apply. This is often the most tax-efficient way for many retirees to give.

  
  

• The Pease limitation is gone for good.

  Pease out for this one! That old rule that could chop itemized deductions by up to 80% isn’t coming back.

Smart moves for timing

• If you itemize (or you’re a C-corp):

  Consider giving more in 2025 (before the new floors hit in 2026). Some folks will “bunch” their giving—make a larger gift in one year, then pause the next—to clear the floors and get more benefit.

  
  

• If you don’t itemize:

  Think about delaying up to $1,000 / $2,000 of your cash giving into 2026 to use the new non-itemizer deduction (but don’t delay support if the nonprofit truly needs help now).

Quick FAQs

Does the new non-itemizer break cover donor-advised funds or private foundations?No—cash gifts to DAFs and private foundations don’t qualify for that specific $1,000 / $2,000 deduction.

What if my gifts don’t exceed the 0.5% floor and I don’t hit an AGI ceiling—can I carry the disallowed amount forward?Generally, no—if you don’t exceed a ceiling, the portion blocked by the 0.5% floor is lost. That’s another reason some people will bunch gifts in certain years.

I run a C-corp. What’s my “sweet spot”?Because of the 1% floor and 10% annual cap, many C-corps will aim to keep total gifts in a 1%–10% band of taxable income in years they choose to give.

Bottom line

Giving is still good—for the causes you love and for taxes—but the when and how matter more now. If you’re planning a sizable gift, stock donation, or QCD, let’s map out the best timing for 2025 vs. 2026 so your generosity goes farther and your tax bill smaller.