Tax Information

Looking Ahead: Upcoming Tax Law Changes and Charitable Giving

Recent federal tax legislation—the One Big Beautiful Bill Act (OBBBA)—extends many provisions of the 2017 Tax Cuts and Jobs Act while introducing several changes beginning in 2026. These include higher standard deductions, an increased estate tax exemption, and new deductions for certain non-itemizers and taxpayers age 65 and older.

While these updates may benefit some taxpayers, they are expected to reduce the tax advantage of charitable giving for many donors who itemize deductions, particularly higher-income households.

What’s changing in 2026?

  • Reduced charitable deduction for itemizers: Donors will no longer be able to deduct the first 0.5% of Adjusted Gross Income (AGI) for charitable contributions.
  • Lower deduction value for top earners: Taxpayers in the 37% marginal tax bracket will see the value of their charitable deduction capped at 35%, reducing the overall tax benefit of giving.
  • Higher standard deduction: Fewer taxpayers may itemize, which can further limit the tax incentives associated with charitable gifts.
     

Why 2025 Matters

For donors who itemize and wish to maximize the tax benefits of their philanthropy, 2025 may be the final year to take full advantage of current charitable deduction rules. As a result, you may wish to consider making charitable gifts on or before December 31, 2025.

Planning Ahead

Depending on your individual circumstances, strategies such as bunching gifts, contributing appreciated securities, or making gifts through a donor-advised fund may help you maximize both philanthropic impact and tax efficiency.

We encourage all donors to consult with their tax or financial advisor to determine the best approach for their personal situation. If you would like to discuss giving options or timing, our advancement team would be happy to speak with you confidentially.

Please note: This information is not intended to be tax or legal advice. Talk with your financial advisor to learn how to make the most of these tax laws.