Tax Law Changes for 2026 and the Potential Impact on Your Giving
The season of generosity is upon us, and as you consider your year-end charitable contributions, we want to highlight what recent tax policy changes could mean for your giving and subsequent deductions.
The One Big Beautiful Bill Act, which Congress passed and President Trump signed into law this summer, extends portions of the 2017 Tax Cuts and Jobs Act and also includes provisions that are set to take effect January 1, 2026.
Staying the Same
- Tax brackets: The current rates – 10%, 12%, 22%, 24%, 35% and 37% – have been made permanent.
- Standard deduction: Most people will continue to use the current standard deduction – $15,750 for individuals and $31,500 for married couples – adjusted annually for inflation.
- Deduction limits on cash gifts: If you itemize, you can continue to deduct cash gifts to public charities, up to 60% of your adjusted gross income (AGI).
- Estate tax exemption: The federal estate and gift tax exemption will remain high and increase to $15 million per individual (indexed annually).
New in 2026
- Tax break for non-itemizers: Individuals can deduct up to $1,000 and married couples $2,000 for charitable gifts, even if you don’t itemize.
- New threshold for itemizers: If you itemize your deductions, you will have to give at least 0.5% of your AGI to receive a tax benefit for charitable giving.
- Cap for high earners: The 37-cent tax benefit for every $1 deducted currently in place will be reduced to 35 percent per dollar.
What You Can Do
As your partners in giving, we encourage you to make decisions about your giving that are right for you and help you meet your charitable goals. With these new laws set to take effect soon, here are a few steps you can take to ensure you are getting the most out of your giving.
- Get expert advice: We encourage you to discuss these tax law changes with your trusted professional advisor, who can help you create a giving plan or adjust your current one to reflect your personal values as well as new laws.
- Give at the right time: You can potentially see bigger tax savings by “bunching” – combining multiple years’ worth of giving into a single year. Giving from a donor-advised fund, which we can work with you establish at the Community Foundation, can be a helpful “bunching” strategy.
- Think beyond cash: A thoughtful mix of cash and non-cash gifts (like stocks or other assets) may offer more benefits, especially with the added complexity new rules bring for itemizers.
We are here for you. If you would like to discuss these new laws and/or your giving, please contact us.