We donate because it matters. But if we’re honest, we also want to do it smart. The One Big Beautiful Bill Act (OBBBA) rewires how charity tax breaks work, and it doesn’t treat every donor the same. Some folks finally get a deduction without itemizing. High-income filers and corporations? They’ll feel a squeeze. Nonprofits will see behavior shift too.
Below, I cut through the noise: what changed, what’s coming next, and how to time your giving so you don’t tip cash into the tax shredder.
The quick backdrop (what actually changed)
Non-itemizers get a new, permanent deduction for cash donations starting in 2026 ($1,000 single / $2,000 married filing jointly). Donor-advised funds and private foundations don’t count. Analysis here: OBBBA charitable shake-up.
Itemizers keep the usual ceilings (60% cash to public charities; 30% appreciated stock; 50% other non-cash), but from 2026 there’s a new 0.5% of AGI floor that blocks a slice of donations.
High earners in the top bracket see the value of itemized deductions capped (OBBBA analysis shows a 35% benefit cap).
C corporations get a new 1% floor before charitable gifts become deductible (on top of the existing 10% ceiling).
To ground the baseline rules in IRS guidance: see Publication 526 (Charitable Contributions) and the IRS explainer Charitable contribution deductions.
Ninety percent of taxpayers typically take the standard deduction, so their giving didn’t lower taxes. OBBBA flips that a bit in 2026: $1,000 (single) or $2,000 (MFJ) for cash gifts to qualified public charities, outside private foundations and DAFs. That’s real money for everyday donors. Policy breakdown: OBBBA charitable shake-up. Also skim the IRS basics in Publication 526.
Action: Keep your receipts and acknowledgments. The IRS spells out what must be in a written acknowledgment for gifts $250+ here: Charitable contributions: written acknowledgments and Publication 1771.
If state and local tax (SALT) rules let more households itemize again, charitable deductions become relevant for a bigger crowd. For the current SALT mechanics and limits, rely on Topic 503 (Deductible taxes) and Instructions for Schedule A. (OBBBA commentary suggests more itemizers ahead; exact state-by-state benefit varies.)
Action: If you’re in a high-tax state, run the math both ways (standard vs itemized). If itemizing wins, your charitable planning matters more.
Example: AGI $200,000 and you donate $10,000. Under the 0.5% floor, the first $1,000 isn’t deductible, so only $9,000 counts. That’s real money lost if you give every year. Policy details: OBBBA analysis; core IRS rules in Publication 526 PDF.
Action: Consider bunching (bigger gifts in fewer years) to clear the floor with room to spare.
Cash to public charities: up to 60% of AGI
Appreciated stock (LT): up to 30% of AGI
Other non-cash: often 50% of AGI
If you overshoot, you can carry forward up to five years. See Publication 526 and the IRS quick explainer Charitable contributions for the lay of the land.
Action: If you own stock with big gains, gifting appreciated securities can be ultra-efficient (deduction + skip the capital gain). Confirm your limits before you transfer.
OBBBA analysis points to a 35% cap on the benefit of itemized deductions for top-bracket filers (vs. a 37% bracket). It’s not the old Pease haircut, but it still chips the tax savings on big gifts. Source: OBBBA charitable shake-up.
Action: If you regularly make six-figure gifts, work with your advisor on timing and asset choice (cash vs appreciated stock) to counter the haircut.
C corps have long faced a 10% of taxable income ceiling for charitable gifts. OBBBA adds a 1% floor—the first 1% isn’t deductible. Smaller companies may rethink routine gifts; bigger firms can still plan around it. IRS’s baseline corporate rules are here: Charitable contributions by corporations. Policy analysis: OBBBA.
Action: If you give through your C corp, aim above that 1% floor or move gifts to the year that makes the deduction meaningful.
The tough parts (floors, caps) kick in 2026. That makes 2025 your decision year.
Itemizers & corporations: consider bunching donations into 2025 to lock in bigger deductions under today’s rules.
Non-itemizers: you may wait until 2026 to use the new $1,000 / $2,000 above-the-line write-off.
For foundational “how much and how” rules, keep Publication 526 handy. Planning note: if SALT changes push you into itemizing in 2025, charitable gifts can stack on top.
If you’re 70½+, Qualified Charitable Distributions (QCDs) let you send money directly from your IRA to a qualified charity. Those dollars don’t hit taxable income and don’t require itemizing. Start with the IRS newsroom explainer: Qualified charitable distributions allow eligible IRA owners up to $100,000 in tax-free gifts and general IRA QCD FAQs; deeper detail lives in Publication 590-B.
Action: If RMDs push you into a higher tax bill, a QCD can neutralize income and support your cause.
The IRS Tax Exempt Organization Search (TEOS) tool lets you confirm a charity is qualified before you give. Use the TEOS page or jump straight into the TEOS search app. If you’re curious about what’s on file, you can browse bulk datasets and dataset guides.
Action: Check status before you donate—especially for new or local organizations.
How this plays out in real life (three snapshots)
Single filer, $60k AGI, gives $800 to church + local food bank.
In 2025, no benefit unless itemizing (unlikely). In 2026, they can deduct the full $800 above the line (under the $1,000 cap). Rules framework: Publication 526.Married couple, $400k AGI, gives $20,000 annually.
In 2025, they likely itemize and deduct $20,000. In 2026, a 0.5% AGI floor trims $2,000 off the deduction, and the 35% benefit cap shaves savings. Analysis: OBBBA charitable shake-up.C corp, $1,000,000 taxable income, gifts $10,000.
From 2026, the first $10,000 (1%) doesn’t count; deduction = $0 unless they give more. Baseline corporate rules: IRS corporate charitable contributions.
Audit-proof your giving (five quick wins)
Use the right acknowledgment for gifts $250+: see written acknowledgment rules.
For property gifts, read the IRS quick guides under Charitable contributions (non-cash documentation and valuation).
Double-check the org in TEOS before wiring funds.
Stock gifts: confirm the 30% AGI limit applies to your specific situation in Publication 526.
Stack timing: bunch in 2025 if you itemize; wait for 2026 if you’ll use the non-itemizer deduction (policy context: OBBBA analysis).
Quick summary to this idea
Non-itemizer deduction (2026): $1,000 (single) / $2,000 (MFJ), cash only, no DAFs or private foundations.
0.5% floor (2026): trims a slice of your deductible gifts; bunching helps.
Ceilings unchanged: 60% cash, 30% appreciated stock, 50% other non-cash.
High earners: deduction benefit capped around 35% (OBBBA analysis).
C corps: new 1% floor before gifts deduct.
QCDs (70½+): still powerful; avoid income and no itemizing required.
Most common “but what about…” questions
Q: Do I need to itemize to get any charity tax break?
A: In 2026, no—non-itemizers can deduct up to $1,000 / $2,000 for cash gifts to qualified public charities (not DAFs/private foundations). Policy summary: OBBBA analysis; qualification basics: Publication 526.
Q: Will the 0.5% floor really matter?
A: No. QCDs stay off your taxable income and don’t need itemizing. Start here: QCD newsroom explainer and IRA FAQs; deep dive: Publication 590-B.
A: Use the IRS TEOS search. If they’re not there, think twice before you donate.
A: Keep Publication 526 for individuals and Charitable contributions by corporations for C corps.
Need a plan before you give?
If you’re unsure whether to bunch in 2025 or delay to 2026, we can map it out with you. Start with a few of our guides on the IRSProb Blog, or talk strategy if your return’s complicated (audit risk, old balances, etc.). If you do need help on IRS procedures, these service pages are a good launchpad: IRS Audits and Offer in Compromise.
Final word
Don’t donate on autopilot. Check the organization. Check your itemize vs standard math. Then decide: bunch now or wait. A few small tweaks can protect both your generosity and your bottom line.
