As we look at maximizing charitable deductions in 2026, donors must consider the impact of tax legislation.
Last fall we summarized the “One Big Beautiful Bill Act” that was passed and its effect on charitable giving. The changes were scheduled to begin this year, so a review of those changes and given some experience now seems in order.
Maximizing Charitable Deductions in 2026 for Standard Filers
One of the most notable changes is the creation of a charitable deduction for taxpayers who do not itemize deductions.
Beginning in 2026, qualifying taxpayers who claim the standard deduction may also claim an additional above-the-line deduction for charitable contributions:
- Up to $1,000 for single filers
- Up to $2,000 for married couples filing jointly
This provision may provide a tax benefit to millions of taxpayers who previously received no direct federal tax deduction for charitable gifts because they did not itemize deductions.
It is important to note that contributions to donor-advised funds and certain private foundations generally do not qualify for this deduction.
The Impact of Higher Standard Deductions on Giving
The legislation also increases standard deduction amounts, making it even more likely that many taxpayers will choose the standard deduction rather than itemizing.
As a result, charitable contributions alone may not be sufficient to push many households above the threshold required for itemized deductions. For these individuals, the new above-the-line charitable deduction may provide meaningful tax relief while preserving the simplicity of the standard deduction.
New Rules for Taxpayers Who Itemize
For taxpayers who continue to itemize deductions, charitable giving remains an important planning opportunity. However, new limitations take effect beginning in 2026.
Navigating the 0.5% AGI Threshold
One significant change is the introduction of a 0.5% adjusted gross income (AGI) threshold for charitable deductions.
Under this rule, charitable contributions are deductible only to the extent that they exceed 0.5% of AGI.
For example:
- A taxpayer with $100,000 of AGI must exceed $500 in charitable contributions before any deduction becomes available.
- A taxpayer with $500,000 of AGI must exceed $2,500 in charitable contributions before charitable deductions can be claimed.
Existing charitable deduction percentage limits and carryforward rules generally remain in place.
Although this change may seem modest, it could reduce the value of deductions for taxpayers who make relatively small annual charitable gifts while itemizing.
Changes to SALT and High-Income Limitations
Another provision of the law increases the limitation on state and local tax (SALT) deductions.
For many taxpayers, a higher SALT deduction may make itemizing more attractive than it has been in recent years. This could indirectly increase the value of charitable deductions because more taxpayers may once again find themselves above the itemization threshold.
However, income-based phase-outs and other limitations may affect eligibility, making personalized tax planning particularly important.
Additional Limitation for Top-Bracket Taxpayers
High-income taxpayers should be aware of another important change.
For taxpayers in the highest federal income tax bracket, the value of itemized deductions is effectively capped. As a result, charitable deductions may provide a maximum federal tax benefit of approximately 35%, even though the taxpayer’s marginal tax rate is higher.
While charitable contributions can still be highly effective as part of a broader tax and estate planning strategy, affluent taxpayers may want to revisit their giving plans with their advisors to evaluate the impact of this limitation.
Planning Strategies for Maximizing Charitable Deductions in 2026
Whenever tax laws change, opportunities emerge for proactive planning.
Depending on individual circumstances, strategies worth discussing with your advisors may include:
- Bunching multiple years of charitable gifts into a single tax year
- Coordinating charitable gifts with years of unusually high income
- Evaluating the ongoing role of donor-advised funds
- Reviewing appreciated securities as a charitable gifting vehicle
- Aligning charitable plans with broader estate and legacy objectives
The optimal approach will vary from donor to donor. What works for one family may not be appropriate for another.
Maximizing Your Charitable Stewardship
The charitable giving landscape is evolving, but philanthropy remains one of the most meaningful ways individuals and families can support the causes they care about and be effective stewards of the resources entrusted to them.
