The new year brings with it new charitable contributions limits for 2026, as well as imposing new rules on the deductibility of charitable contributions.
The One Big Beautiful Bill Act (OBBBA) of 2025 made significant 2026 charitable deduction changes. While some of the 2026 IRS charitable giving rules aren’t friendly to the highest earners, one change is, and most of the other changes will benefit all but those in the highest bracket.
Charitable contributions both do good and feel good. But how do you lessen the negative tax impact? We’ll show you, so read on.
How charitable deductions change in 2026:
If You Itemize Your Deductions
There is a new floor for itemized tax deductions on 2026 charitable contributions. If you itemize, an amount equal to 0.5% of your adjusted gross income (AGI) will no longer be deductible, thanks to the OBBBA. Which is to say that, if your AGI is $1 million, the first $5,000 of your charitable contribution deductions won’t qualify for tax deductions.
In addition, the OBBBA initiates a new ceiling, as well as the above floor, on all itemized deductions for those in the highest (37%) income tax bracket. For those in the top bracket, the aggregate total of itemized deductions will be reduced by the lesser of:
- 2/37 of your otherwise eligible itemized tax deductions, or
- 2/37 of your taxable income above the applicable threshold for your 37% tax bracket
It’s not as complicated as it looks, and this ceiling only affects those of you in the highest income tax bracket.
If You Use the Standard Deduction
Those who find using the standard deduction makes for more tax savings likely welcomed the 2020-2021 re-institution of an “above-the-line” deduction for charitable contributions of up to $300 for 2020, and, in 2021, the doubling of that amount to $600 for married joint filers.
For you, the OBBBA provides a permanent (as far as any portion of the tax code can be called that) above the line deduction for charitable contributions in 2026 and beyond of $1,000 for single filers and $2,000 for married joint filers.
As always, keep the receipts! You will need the name of each organization you donated to, the amount, and the date of the contribution. And remember that charitable contributions of over $250 must be backed up by a contemporaneous written acknowledgement from the charity.
As illustrated, the OBBBA is a mixed bag when it comes to the deductibility of charitable contributions for 2026 and beyond.
So, how can you plan strategically to make the most out of your goals when making charitable contributions?
Strategies for Tax-Deductible Charitable Contributions
If you itemize your tax deductions, there are still ways to keep your charitable contribution dollars both meaningful and eligible for at least most of the former tax benefit.
You can double up on giving twice your usual annual charitable contribution in alternate years, and gain an extra tax benefit over making your usual contributions annually.
For example, say your AGI for both 2026 and 2027 is $500,000, and you contribute $10,000 to your favorite charities each year. For both 2026 and 2027, the tax benefit of your charitable contributions would amount to $7,500―$2,500 being equal to 0.5% of your AGI.
But, if you gave the same $20,000 in either 2026 or 2027, your tax deduction on these charitable contributions would be $17,500, since your AGI and its applicable multiple would be the same for each year.
If you are over age 70 ½, and have a traditional IRA, you are eligible to make a Qualified Charitable Distribution (QCD) of up to $103,000 (indexed to inflation since 2024) directly from your IRA to the charity or charities of your choice. The full amount goes to the charity without your having to include it in your taxable income.
For those over 70 ½, you can also set up an IRA Charitable Rollover with a one-time tax free gift of up to $53,000 (also indexed to inflation). With these funds, you can set up:
- A charitable gift annuity,
- A charitable remainder annuity trust, or
- A charitable remainder unitrust
If you are age 73 or older, and have a traditional IRA, you can direct some or all of your required minimum distribution (RMD) into charitable contributions, without the necessity of adding the amount to your taxable income for that year.
If you take a longer view, and want your charitable contributions to carry into the future, you might want to consider setting up:
- A donor-advised fund,
- A charitable remainder trust, or
- A charitable lead trust
These can reduce the size of your taxable estate, as well as providing you with tax benefits.
Which strategy is right for you and your charitable contribution goals for 2026 and beyond?
That is for you to determine, in partnership with your fractional CFO or other trusted business advisor and your estate attorney, once you have all the facts and can choose the strategy which best fits the needs of yourself and your family, as well as furthering your charitable goals.
If you have any questions about making the most of your charitable contributions under the new limits, please email us directly or schedule a consultation below―let us help you plan to gain the greatest tax benefit from your worthy charitable goals.
We look forward to helping you!
Until next time—
Peace,
Eric
