Charitable Giving in 2026: What the New Tax Rules Mean

With Giving Tuesday just around the corner and charitable donations typically increasing during the final months of the year, giving back is top of mind for many individuals and families. 

Understanding the tax implications of charitable giving may not bring the same warm and fuzzy feeling as supporting a favorite cause, but it can help make the most of those contributions. And with new tax rules taking effect in 2026, there’s more to consider this year. 

The One Big Beautiful Bill Act introduced new opportunities for some taxpayers while changing how deductions are calculated for others. 

Here are four changes worth understanding before making year-end charitable contributions. 

  1. A New Deduction for Taxpayers Who Don’t Itemize

Previously, taxpayers who claimed the standard deduction generally could not deduct charitable contributions separately. 

Beginning in 2026, individuals who take the standard deduction can deduct up to $1,000 in qualifying cash donations, or $2,000 for married couples filing jointly. 

This applies to cash contributions to eligible charitable organizations. Donations of stock or other property, as well as contributions to donor-advised funds, do not qualify for this particular deduction. 

  1. A New Threshold for Taxpayers Who Itemize

Beginning in 2026, taxpayers who itemize can generally deduct charitable contributions only to the extent they exceed 0.5% of their adjusted gross income (AGI). 

For example, with an adjusted gross income of $200,000, the first $1,000 of charitable contributions generally won’t be deductible. 

A $5,000 donation could result in a $4,000 deduction, subject to other applicable limitations. 

This new threshold makes the amount and timing of charitable contributions important considerations for taxpayers who itemize. 

  1. An Additional Limitation for Higher-Income Taxpayers

For taxpayers in the highest federal income tax bracket of 37%, the tax benefit of itemized deductions, including charitable contributions, is generally limited to 35%. 

In practical terms, a qualifying charitable deduction may reduce federal income taxes by less than it would have under the previous rules. 

  1. The 60% Income Limit for Cash Donations Is Now Permanent

Taxpayers who itemize can generally continue to deduct qualifying cash contributions to public charities up to 60% of their adjusted gross income, subject to applicable limitations. 

The new law made this provision permanent. 

What to Consider Before Year-End 

The new rules do not change the reasons people give, but they may affect the tax benefits associated with charitable contributions. 

Before making a significant donation, it is worth reviewing whether the standard deduction or itemizing applies, the types of contributions being considered and how the new limitations could affect the deduction. 

FGMK’s tax professionals can help evaluate how these changes may affect charitable giving plans. Contact our team to discuss year-end tax planning opportunities. 

Looking for additional ways to approach charitable giving? Read Part 2: Make Your Charitable Giving Go Further: What to Consider Before Year-End. 

 

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