Daperis CPAWhat the New Tax Law Changed About Charitable Giving
If your giving strategy hasn't changed in a few years, it's worth another look, because the rules just did. A recent tax law made three changes to charitable deductions, and depending on whether you itemize, they either help you, cost you a little, or both.
The New Floor: Your First Bit of Giving Doesn't Count
Starting with 2026, if you itemize, only the part of your total giving that's above 0.5% of your income counts as deductible. Give $10,000 with $400,000 of income, and the first $2,000 just isn't deductible. The rest, $8,000, is, subject to the usual limits that already applied.
For most people giving a meaningful amount every year, this is a small haircut, not a dealbreaker. But small, scattered gifts throughout the year now get less benefit than they used to.
The New Perk: Non-Itemizers Can Finally Deduct Something
This is the part worth knowing if you take the standard deduction and figured your giving does nothing for your taxes. Starting in 2026, you can deduct up to $1,000 in cash gifts to charity ($2,000 if married filing jointly), directly, no itemizing needed.
One catch: this only covers direct cash gifts to public charities. A donor-advised fund or a private foundation doesn't count for this specific deduction, even though it's still deductible if you itemize. If you've used a donor-advised fund to bunch your giving, that contribution still won't count toward this new non-itemizer deduction, it's built for direct giving only.
The 60% Ceiling Is Now Permanent
There used to be a higher limit, 60% of your income, on how much of a cash gift to charity you could deduct, and it was set to expire and drop back down. It's now permanent. This mostly matters if you're making a very large gift relative to your income in a single year. For most people, this limit was never close to being a problem anyway.
What This Means for Your Timing
If you itemize and your yearly giving is close to that new 0.5% floor, bunching, giving several years' worth in one year, does double duty now. It still helps you clear the standard deduction threshold, and it also clears this new floor more efficiently than spreading the same total out evenly. A donor-advised fund still works well for this: give a lump sum, take the deduction that year, and hand out the money to charities over whatever timeline you actually want.
If you don't itemize at all, claim the new deduction anyway. It's a real reduction in what you owe, for gifts you were probably already making, and there's no reason to skip it just because you're not itemizing anything else.
Keep It Simple / Key Takeaway 🍕
None of this should change how much you actually give. What changed is how that giving turns into a tax benefit, and it's worth a fresh look at your strategy, especially the new floor if you itemize and the new deduction if you don't, rather than assuming your old approach still works the same way.
If you're also in the top bracket, this rule stacks with a separate cap on itemized deductions, worth reading together.
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