Take Advantage of Charitable Deductions this Year Before They Change in 2026!
The new tax law (the “One Big Beautiful Bill Act”) changes how charitable deductions work starting in 2026, and it creates a short-term opportunity for strategic giving in 2025.
Key Points for You:
- If You Don’t Itemize –
- Starting in 2026, you’ll be able to deduct up to $2,000 (married) or $1,000 (single) for cash gifts to qualified charities, even if you take the standard deduction.
- No deduction like this exists today, so small, non-itemizing donors might actually wait until 2026 to make smaller cash gifts.
- But this deduction applies only to cash (not property or stock), direct to charity (no donor-advised funds).
- If You Do Itemize –
- Two new limits hit in 2026:
- Floor: You can only deduct the portion of charitable giving above 0.5% of your MAGI (1% for corporations).
- Cap: You can deduct no more than 35% of MAGI (down from 37%).
- Bottom line: Larger donors who itemize will usually get a bigger tax benefit giving in 2025 than in 2026.
- Accelerating Gifts Could Pay Off –
- Consider making large donations now, especially of appreciated stock or other noncash property.
- You might also “front-load” donations to a donor-advised fund this year, then spread the actual gifts to charities over future years.
- Clean out closets and donate property now—it’s deductible this year without the new floor.
- SALT Cap Changes Help Itemizers in 2025 –
- The state and local tax (SALT) deduction cap jumps from $10,000 to $40,000 this year (phased out for the wealthiest).
- This makes itemizing more attractive in 2025, which could pair nicely with accelerating charitable giving before the year ends.
- Other Relevant Changes –
- Standard deduction rises slightly in 2025.
- Extra senior deduction for those 65+ (phased out for higher incomes).
- Auto loan interest deduction (up to $10k) — minor charitable relevance but affects overall tax picture.
- Qualified Charitable Distributions (QCDs) from IRAs remain unchanged — up to $108,000 in 2025, reducing taxable income and satisfying RMDs.
If you regularly give to charity and itemize, 2025 is your last chance to take full advantage of the current rules before the new floors and caps reduce deductions in 2026. The combination of the higher SALT limit this year and the current charitable deduction rules could make bunching or accelerating your donations into 2025 a smart move. For smaller donors who don’t itemize, it may make sense to hold some cash gifts until 2026 to use the new above-the-line deduction.
We’ll want to look at your MAGI, giving habits, and itemizing status to decide whether shifting your charitable timing will lower your taxes.