If you regularly give to charity or are planning to there are some big changes coming that could affect your taxes. The One Big Beautiful Bill Act (OBBBA) introduces new rules starting in 2026, and depending on your situation, they might help you… or they might shrink the tax benefits you’re used to. Let’s break it down.
A Win for Non-Itemizers
Up until now, if you take the standard deduction, you haven’t been able to claim a tax break for charitable donations. That’s changing in 2026.
- Single filers can deduct up to $1,000 in cash donations each year.
- Married couples filing jointly can deduct up to $2,000.
It’s not huge, but it’s something especially if you give regularly. (One catch: donations to donor-advised funds won’t count.)
New Hurdles for Itemizers
If you itemize your deductions and are a generous donor, here’s where it gets tricky. Starting in 2026, you can only deduct charitable contributions that exceed 0.5% of your adjusted gross income (AGI).
Here’s a quick example:
- Say your AGI is $200,000 and you donate $10,000.
- Under the new rules, the first $1,000 (0.5% of $200,000) won’t count.
- That means you’d only get to deduct $9,000.
And unlike other deduction limits, you can’t carry forward that disallowed portion unless your donations exceed the overall annual limits (like the 60% of AGI cap for cash donations).
What About Corporations?
Regular C corporations will feel the change too. Beginning in 2026:
- Contributions are deductible only to the extent they exceed 1% of taxable income.
- If donations are over 10% of taxable income, the extra disallowed portion can be carried forward for up to five years.
Planning Ahead: Opportunities Before 2026
The good news is you still have 2025 to take advantage of today’s more generous rules. If you’re thinking about making a large charitable gift, you may want to accelerate your giving before the new limits kick in.
- Consider doubling up on donations in 2025 and then scaling back in 2026.
- This way, you maximize your deductions now without losing some of the benefit to the new AGI floor.
Smart Strategy for the Future: “Bunching” Donations
Once the rules change, you may want to use a bunching strategy to get the most out of your giving:
- Make several years’ worth of donations in one year to surpass the new threshold and itemize.
- Then in the next year, take the standard deduction and donate little or nothing.
Example: Donate two years’ worth in 2026 (and itemize), then take the standard deduction in 2027 while skipping or reducing donations.
If you give to charity, the OBBBA changes are going to matter. Non-itemizers get a small new benefit, but itemizers especially higher earners will need to rethink how they structure donations. Planning ahead now could mean the difference between fully maximizing your tax savings or losing out on deductions you’ve counted on.