As we approach the end of 2025 and look ahead to a new year, it’s a good time to become familiar with recent federal legislation introducing new rules for charitable giving starting in the 2026 tax year. These changes are designed to make charitable deductions more accessible while reshaping how higher earners plan their philanthropic contributions.
Below, we break down three key changes and what they could mean for you as you plan your giving strategy for the year ahead.
1. New $1,000 Deduction for Non-Itemizers
What’s new: Starting in 2026, taxpayers who take the standard deduction (i.e., who do not itemize) can deduct up to $1,000 in cash contributions to qualified public charities ($2,000 for married couples filing jointly).
What it means: This provision expands access to charitable deductions for millions of households who previously could not deduct donations unless they itemized.
Important note: This deduction only applies to cash gifts to public charities. Donations of property, securities, or contributions to donor-advised funds do not qualify.
2. New Floor for Itemizers
What’s new: Taxpayers who itemize deductions will now need to meet a minimum qualified charitable contribution of 0.5% of adjusted gross income (AGI) before any charitable contributions may be deducted.
What it means: Small contributions below this threshold may no longer be deductible for itemizers. Higher levels of giving will still qualify, but this change could influence the timing and structure of donations for those who regularly itemize.
3. Reduced Deductibility for High Earners
What’s new: For individuals in the top 37% tax bracket, the benefits of itemized charitable deductions will be limited to 35%.
What it means: High earners may see slightly fewer tax benefits from charitable giving, which could prompt them to adjust the timing or size of donations to maximize impact.
Why These Changes Matter
These changes may affect when and how you choose to give:
- Non-itemizers now have a clear incentive to make charitable gifts, even if their deductions don’t exceed the standard itemization threshold.
- Itemizers may want to consider strategies such as “bunching” contributions into a single year to surpass the new AGI floor.
- High earners could benefit from making larger contributions prior to 2026 to take advantage of the higher deduction rates.
How We Can Help
At FNBO Wealth, we understand that charitable giving is about more than tax benefits — it’s about aligning financial goals with personal values and community impact. Our team can help you evaluate your options and determine the best timing and structure for your charitable contributions.
