Charitable Giving in 2026

The tax benefits of charitable giving took a hit for a lot of people in 2018, when federal standard deduction amounts were increased quite a bit. That reduced the appeal of itemizing for most people – and without itemizing, charitable giving isn’t deductible.

In 2026, more changes to charitable giving rules are coming, and they could make it beneficial to either hold off on giving or accelerate your giving by the end of the year. Let’s take a look.

WHAT’S CHANGED?

There are two major updates that take effect in 2026:

• Taxpayers who use the standard deduction can now also deduct up to $1,000 ($2,000 for married couples filing jointly) in charitable cash donations to public charities (not donor-advised funds or private foundations).
• Taxpayers who itemize face a new 0.5% “floor,” meaning deductions apply only to contributions above 0.5% of adjusted gross income, including donations of clothing and appreciated long-term gain investments. The highest-income taxpayers (those with income in the 37% tax bracket) will get a reduced benefit, as the maximum value of the deduction will be 35%.

WHY IT MATTERS

The new rules raise planning opportunities for charitable givers. Here’s how you can make the most of the new rules:

IF YOU MAKE SMALL ANNUAL GIFTS AND DON’T ITEMIZE

Consider making your 2025 gift in January 2026, when it could be deductible.

IF YOU HAVE AN ANNUAL BUDGET FOR GIFTING

Consider “bunching” donations into one year to minimize the impact of the 0.5% threshold, or, potentially even better, make the bunched donation in 2025 before the new rules take effect. Donor-advised funds could give you both flexibility and tax efficiency.

For example, if your AGI is $100,000, the first $500 of charitable giving won’t count toward itemized deductions starting in 2026. Assuming your income stays the same, the floor will always be $500 no matter how many years’ worth of gifts you make – so by making several years of gifts at once, you’re hit with the floor only one time instead of every year.

IF YOU HAVE HIGH INCOME

If you’re in the 37% bracket, the value of the deduction will be limited starting in 2026. Consider bunching donations in 2025 and how the new rules might affect your giving strategy.

WHAT YOU SHOULD DO NOW

Review your charitable giving strategy with your tax professional before year-end:

• Check whether you’ll itemize or take the standard deduction for 2025. Remember that it may be more beneficial to itemize this year because of the increased SALT limit.
• Estimate your floor and consider bunching gifts in 2025 or 2026 accordingly.
• Talk to your financial advisor and tax professional about whether a donor-advised fund might be a beneficial way to give.

Charitable giving remains a powerful way to support causes you care about and you can get tax benefits too. Plan ahead to make the most of these opportunities.