Charitable giving has long been an important part of year-end tax planning for individuals and families. Beginning in 2026, several changes to the federal tax rules affect how taxpayers approach their donations, including when to give, what to give, and whether those gifts will generate a tax benefit.
While charitable contributions will continue to offer planning opportunities, the rules are becoming more nuanced. Both taxpayers who itemize and those who claim the standard deduction may want to review their giving strategies for 2026.
A New Deduction for Taxpayers Who Do Not Itemize
Beginning in 2026, taxpayers who claim the standard deduction may once again be eligible for a charitable contribution deduction. Single filers may deduct up to $1,000 of qualifying cash contributions, while married couples filing jointly may deduct up to $2,000.
This deduction generally applies to cash contributions made directly to certain qualified charitable organizations. Contributions to donor-advised funds, supporting organizations, and certain non-cash gifts may not qualify. As a result, taxpayers who do not itemize should pay close attention to the type of organization receiving the donation and the form of the gift.
For many taxpayers, this change may restore at least a partial tax benefit for charitable giving, even when total deductions are not high enough to itemize.
A New Floor for Itemized Charitable Deductions
Taxpayers who itemize deductions will also face a new limitation beginning in 2026. Charitable contributions will generally be deductible only to the extent they exceed 0.5% of adjusted gross income (AGI).
For example, a taxpayer with $300,000 of AGI would not receive a charitable deduction for the first $1,500 of contributions. Only contributions above that threshold would be eligible for a deduction, subject to the usual charitable contribution limitations.
This change may reduce the tax benefit of smaller annual gifts for taxpayers who itemize. It may also make timing more important, particularly for those who make consistent annual charitable contributions.
Reduced Benefit for Certain Higher-Income Taxpayers
Higher-income taxpayers may also see a reduced tax benefit from charitable deductions beginning in 2026. For taxpayers in the top federal income tax bracket, the value of certain itemized deductions, including charitable contributions, may be capped at 35%, rather than providing a benefit at the top marginal rate.
The charitable intent remains the same, of course, but the after-tax cost of giving may change. Taxpayers making significant gifts should consider modeling the impact of the new rules before deciding whether to accelerate, defer, or restructure planned contributions.
Planning Opportunities For 2026
With these changes now in effect, 2026 may be an important year to revisit charitable giving plans.
Depending on a taxpayer’s income, deduction profile, and charitable goals, potential strategies may include:
- Bunching charitable contributions into a single tax year to exceed deduction thresholds
- Donating appreciated stock or other appreciated assets instead of cash
- Using donor-advised funds as part of a broader multi-year giving strategy
- Making qualified charitable distributions, or QCDs, from IRAs for taxpayers age 70½ and older
QCDs may remain especially useful for eligible IRA owners because they can satisfy charitable goals while potentially reducing taxable IRA distributions. However, the best approach depends on the taxpayer’s broader income, estate, and cash flow planning.
Planning Ahead
The changes do not eliminate the tax benefits of charitable giving, but they may affect the timing and efficiency of those gifts. Taxpayers who give annually, make larger charitable contributions, or rely on itemized deductions should consider reviewing their plans before year-end.
A thoughtful approach can help ensure charitable giving remains aligned with both personal goals and tax planning objectives.
If you have questions about charitable giving strategies or how the 2026 tax law changes may affect your situation, contact your ShindelRock team for assistance.
Written by: ShindelRock
