A simple guide to maximizing your impact and understanding the new IRS rules
Charitable giving is a meaningful way to support the causes you care about—and starting in 2026, the IRS is updating how donations can be deducted on your tax return. These changes create new opportunities for many taxpayers while adding new limits for others. Here’s an easy overview to help you plan your giving with confidence.
1. New Tax Break for People Who Don’t Itemize
Beginning in 2026, even if you take the standard deduction, you can still receive a tax benefit for charitable giving:
- Deduct up to $1,000 (single filers).
- Deduct up to $2,000 (married filing jointly).
- Applies only to cash gifts made to qualified 501(c)(3) public charities.
- Donations to donor-advised funds or private foundations don’t qualify.
This new “universal” deduction makes charitable giving more accessible for millions of taxpayers who haven’t been able to deduct donations in recent years.
2. New Rules for Itemizers
If you itemize deductions, charitable giving can still reduce your taxes—but the rules will be different in 2026.
Key changes:
- A new 0.5% AGI floor:
Only donations above 0.5% of your income count as deductible.
(Example: If your AGI is $200,000, the first $1,000 of donations won’t provide a tax benefit.)
[fedsmith.com] - The 60% of AGI limit for cash gifts to public charities is now permanent.
- High-income earners in the top tax bracket will have their tax savings capped at 35% per dollar donated (down from 37%).
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These changes may have the greatest impact on higher-income households and those used to deduct many smaller gifts.
3. Cash vs. Non-Cash Donations
- The new standard deduction charitable benefit applies only to cash gifts.
If you itemize, you can still deduct non-cash donations (like clothing or household items), but the new AGI floor still applies.
4. Timing Matters: 2025 vs. 2026
Because 2026 introduces new limits, people planning larger charitable gifts may benefit from donating in 2025instead.
Your advisor can help determine what makes sense based on your income, tax bracket, and goals.
How to Make the Most of Your Donations
- Keep receipts or written acknowledgments
Required for donations of $250 or more.
- Confirm the charity is a qualified 501(c)(3)
This ensures your gift is eligible for deductions.
This determines which rules apply to you.
These may qualify under the new standard deduction charitable benefit.
We can help you plan the timing and structure of your giving to maximize both your impact and tax benefits.
Final Thoughts
Charitable giving is ultimately about supporting the work and values that matter most to you. With the IRS introducing the biggest changes in a decade, understanding how these rules affect you can help you give wisely—and potentially receive valuable tax benefits.
If you’d like help creating or updating your charitable giving plan, we’re here to guide you.
Together, we can work to keep you on-track toward your financial goals.
Request a consultation to learn more.
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