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Charitable Giving Has Changed
I used to make charitable contributions with cash or cash equivalents (check, credit card, etc). I simply didn’t understand there were better ways to give that could reduce my tax bill and ultimately allow my charitable gift to go farther. If that sounds like you, read on because the tax rules for charitable giving just changed again.
The One Big Beautiful Bill Act (OBBBA) had several changes regarding taxable giving that go into effect in the 2026 tax year. This will likely impact you whether you give $500 or $50,000 a year to charity. OBBBA quietly changed the math on writing a check to your church, alma mater, or favorite veteran’s charity.
One Impactful Change
If you give $10,000 a year to charitable causes, have an adjusted gross income of $200,000 and itemize your taxes. In 2025, you received a deduction for the full $10,000. In 2026, your deduction is reduced to $9,000. The $1,000 tax deduction is just gone. Assuming you’re in the 22% tax bracket, that’s a $220 increase in your tax bill every year. If you were giving $2,000 a year, you’d only be able to deduct $1,000 cutting your deduction in half.
This is just one of the changes. If you regularly give to charity, do you know how you’ll be impacted?
The Good News
The changes aren’t all bad. OBBBA brought back a charitable deduction for those who don’t itemize. Single filers can deduct $1,000 and married-filing-jointly filers can deduct $2,000 for charitable cash donations.
Additionally, if you itemize there are tools available to optimize your giving. These include bunching your gifts, using a donor advised fund (DAF), and gifting appreciated stock. Additionally, if you’re over 70½, you could make Qualified Charitable Distributions. Depending on your income, how much you give, and what other itemized deductions you have, creating a charitable gifting plan using these tools could save you thousands of dollars a year.
None of those tools are new. The new tax rules just make them more impactful. Even if you don’t notice it, every year you now lose some of that deduction. Whether you write a monthly check to your church or a big donation in December, you need a plan.
That’s exactly what I dig into in my white paper, Charitable Giving After OBBBA. It provides much more detail on what’s changed and the tools you can use to optimize your giving. I explain the impact for a hypothetical couple over a five-year period looking at numerous scenarios and how using one tool or multiple tools can make a difference in their taxes.
You’re not giving to charity for the tax breaks. You’re giving because you believe in what that organization is doing. Optimizing your plan may allow you to give more or at least keep more of your money versus paying it in taxes.
The white paper isn’t a sales pitch. It’s the math and tools I walk clients through written in the same plain language as my newsletter. It’s the document I wish I had years ago when I was still just writing checks to charity.
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