Here’s the good news: although the One Big Beautiful Bill Act (OBBBA) makes significant changes to the treatment of charitable contributions, none of these rules take effect until January 1, 2026. That means taxpayers and businesses have all of 2025 to take advantage of the current, more favorable system. With some foresight, you can position yourself to maximize deductions now while also preparing for the new landscape.
What to Do in 2025
- Accelerate Your Giving
If you itemize your deductions, 2025 may be the perfect year to move future contributions forward. For example, instead of donating $10,000 in both 2025 and 2026, consider donating the full $20,000 in 2025. By “front-loading” your giving, you can deduct the entire amount under today’s rules without losing any portion to the new AGI floor that will apply starting in 2026. - Leverage Donor-Advised Funds While You Still Can
Under the OBBBA, contributions to donor-advised funds (DAFs) will no longer qualify for the new non-itemizer deduction. However, in 2025, these accounts remain fully available as a tax-efficient planning tool. If you’ve been considering establishing or adding to a DAF, doing so before year-end may be the last chance to maximize their use without restriction. - Coordinate Corporate Giving
For business owners operating C corporations, 2025 is the year to maximize charitable contributions before the new 1% taxable income floor is imposed. Large-scale corporate giving campaigns, community initiatives, and foundation support may be more tax-advantageous if accelerated into the current rules.
Planning for 2026 and Beyond
Once the new rules take effect, strategies will need to shift. One of the most effective approaches will be “bunching” donations:
- Group multiple years of giving into a single tax year. By combining two or three years’ worth of donations, you can ensure that your contributions exceed the new 0.5% AGI floor (for individuals) or 1% taxable income floor (for corporations).
- Alternate between “on” and “off” years. In high-giving years, itemize your deductions to maximize the tax benefit. In the following year, scale back your contributions, take the standard deduction, and resume giving heavily in the next cycle.
For example, an individual donor could contribute three years’ worth of charitable gifts in 2026, itemize deductions that year, then take the standard deduction in 2027 while donating minimally. In 2028, they will repeat the cycle. This allows donors to support their favorite causes consistently over time while still capturing as much tax benefit as possible.
Charitable giving will remain a powerful tool for both generosity and tax planning, but the rules of the game are shifting. By acting strategically, you can:
- Lock in larger deductions under the current system in 2025.
- Adapt your giving patterns in 2026 and beyond to preserve tax efficiency.
- Continue making a meaningful impact on the causes and communities you care about most.
At BASC Expertise, we believe in being proactive, not reactive. These upcoming changes to charitable deductions are just one example of why smart planning today can make all the difference tomorrow.
If charitable giving is part of your financial or business strategy, now is the time to sit down with a qualified tax professional and create a clear plan for 2025 and beyond. With the right strategy, you can maximize your tax savings and keep your generosity thriving well into the future.